China's central government should set up a fund of 500 billion yuan ($79.25 billion) to help small-and-micro enterprises (SMEs) tackle the financial difficulties they are facing, said central bank adviser Li Daokui on Monday.

"The money should be used to pay the insurances of the employees in those companies. Not for long, just the one or two years when the companies are in financial trouble," Li said at the sidelines of the annual session of the National People's Congress.

Li, who is also the director of the Center for China in the World Economy at Tsinghua University, said he believes the move would be more helpful and efficient than simply cutting down tax in terms of relieving the financial pressure of those companies.