China's SMEs Prepares for WTO Business Operations

China's small and medium-sized enterprises (SMEs) are busy preparing for more profitable business opportunities after the country's entry into the World Trade Organization (WTO).

This is the center of discussion among leaders of Chinese SMEs who are in Shanghai attending a business forum on the development of SMEs, which opened Monday as part of a series of activities for the 8th APEC SME Ministerial Meeting.

The Chinese participants in the forum expressed a similar view: it is urgent for Chinese SMEs to increase their competitiveness, especially when China's WTO entry will bring them more business opportunities.

They say a more open domestic market after China enters the WTO will provide a bigger arena for Chinese SMEs, particularly those of non-state ownership, and make it possible for more of them to become business partners of multinationals.

The fund-thirsty Chinese SMEs are especially expecting the opening of China's capital market and the arrival of foreign banks, saying it will not be long before more fund-raising channels opened.

However, all the SME representatives are fully aware that Chinese SMEs in general are not competitive enough. They must take quick steps in system reform and structural upgrading so as to face up to the impact of internationalized production and trade liberalization after China's WTO accession.

Lu Longchun, from the Zhejiang Hengdian Group, a famous township enterprise engaged in a wide variety of business operations, suggested that SMEs in China make adjustments according to WTO rules as quickly as possible, with emphasis placed on a better industrial and technological structure, so that a certain enterprise can concentrate on the business it is good at and master specific high technologies that suit its operation.

In an effort to compete with foreign companies, the Hengdian Group is to build a modern industrial park on some 267 hectares of land in the Pudong New District of Shanghai, China's economic engine on the lower reaches of the Yangtze River.

Zhang Jian, general manager of the Beijing Honghui Medicine Co., Ltd., saw a favorable environment for patent protection under WTO rules. "Our new medicine products can be better protected after the country joins the WTO and we can cooperate well with our foreign partners in developing new products," Zhang said. "We will also have more opportunities to cooperate with foreign companies in the wholesale of medicine products so as to expand our business operations."

The Shanghai Xinyuan Scientific and Technological Cooperation Company, a technology-intensive enterprise in Shanghai's textile industry, is focusing on improving the quality of its products and enhancing the market popularity of some key brands, according to General Manager Wang Yaohua.

To win in international competitions, he said, SMEs should streamline management, give full play to the role of the staff's initiative and creativeness, and employ as many talented people as possible.

Henry W. K. Chow, chairman of the APEC SME Business Forum and a senior official IBM, is keen on the quality of leaders of SMEs. He suggested they establish a brand new and flexible work style for a new management mode with the help of technological innovation.

This is what SMEs should follow if they want to grow into big companies through fierce competition, he said.

During the discussion, some SMEs appealed to the Chinese government for more support so that China's SMEs, generally at a low level in terms of management, technology and equipment, and product quality, can survive and develop after the country enters the WTO.

In response, Minister in charge of the State Economic and Trade Commission Li Rongrong said the Chinese government will take series policy measures to encourage the development of SMEs. But finally, it depends on the efforts of these enterprises to complete with foreign companies in a fair legal environment and under the market rules, he said.

China now has more than eight million SMEs, which account for 60 percent of the country's gross industrial output value and 40 percent of the total pre-tax profit of all industrial enterprises put together.






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