BEIJING, China - China announced more help Wednesday for its struggling private business sector, unveiling a $2.5 billion fund to finance new small businesses and promising tax breaks and more lending for entrepreneurs.

The Cabinet announcement was one of the first concrete measures announced by the government following repeated pledges to help entrepreneurs who have been squeezed by a slump in U.S. and European demand and curbs on bank lending.

Entrepreneurs generate most of China's new jobs and wealth, but thousands have been driven out of business. The survivors have slashed payrolls, raising concern among China's communist leaders about possible unrest.

A Cabinet statement issued after a meeting led by Premier Wen Jiabao, the country's top economic official, said small companies were essential to helping China keep growth fast and stable despite the global downturn.