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SMEs Inject Enormous Vigor into China's Economy
China is taking various measures to help developing its small and medium-sized enterprises (SME), in an effort to boost its national economic development, official sources said Sunday.
Di Na, deputy director-general from the SME Department of China's State Economic and Trade Commission (SETC), told Xinhua that in view of global economic slowdown, China has adjusted its economic policy, and will continue to do so, to give full play to the SMEs developing potential so as to expand domestic demand and maintain the momentum of current economic development.
The last 20-odd years have seen the booming of SMEs in China, thanks to the reform and opening-up policy the country implemented. Statistics from the SETC show that up to now, the number of SMEs has exceeded eight million and covers 99 percent of the total enterprises in China. During the last 10 years of China's rapid economic development period, SMEs contributed 76 percent of the newly-added industrial output value, and provided 75 percent of the total job opportunities in cities and towns of the whole country.
China's well-known economist Wu Jinglian believes the role of SMEs, which are mostly non-governmental, can never be overestimated. After conducting studies in the coastal areas in southeast China, where SMEs flourish, Wu said this area faces no pressure of unemployment, and economy there has recorded rapid progress in spite of the deflation trend elsewhere in China.
With the decreasing export value due to the global economic slowdown, and the further reform of state-owned enterprises (SOE), SMEs' enormous capacity in absorbing laid-off workers from the SOEs, expanding domestic demand, and technological renovation becomes more and more conspicuous.
The Chinese government also attaches greater importance to the SME development.
"The State Council first proposed the policy of 'managing well large enterprises while adopting a flexible policy toward small ones', then 'giving small enterprises support as well as flexibility', and now it requires 'paying equal attention to developing large enterprises and small ones'. It is giving more and more attention to SMEs.
"In July 1998, the State Council established the SME Department in the SETC, against the backdrop of laying off civil servants nationwide, to handle specially the SME affairs. In August 2000, it then issued a document to promote SME's development, the first of its kind since the People's Republic of China was founded in 1949." Di stressed.
Lin Jiabin, an expert from the State Council Development Research Center, believes that the SMEs' rapid development has outgrown the current system, and governmental administration, financial services and laws for SMEs are also bound to be adjusted after China's entry into the World Trade Organization.
However, as Di pointed out, difficulty in financing poses a big challenge to SMEs' development both at home and abroad.
" To solve this problem, 48 percent of the countries and regions throughout the world have established credit guarantee systems. And China is one of them. By the end of June, China has set up 260 credit guarantee agencies in 30 Chinese provinces, and they had raised funds totaling 7.6 billion yuan, which is enough for guaranteeing SMEs to get 40 billion to 50 billion yuan in loans." Di said.
"As another channel of financing, the second board stock market for SMEs will also be opened at an appropriate time." Di added.
Wang Yucong, another expert from the State Council Development Research Center, called for even more support and services from the government.
Minister Li Rongrong in charge of the SETC said his commission is considering providing information services to the SMEs through the Internet.
Besides, to encourage technological renovation in SMEs, China has set up a special fund, which had benefited nearly 2000 projects with 1.4 billion yuan by the end of 2000.
As to the issue of SMEs' credit, the SETC has ushered in the credit system and listed 100 SMEs with good credibility, and besides, the National People's Congress is also drafting a law on boosting SMEs, Di said.
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