Top Biz News

SMEs expected to play more important role

(China Daily)
Updated: 2006-09-15 09:14

GUANGZHOU: The Chinese Government is expecting the country's small and medium-sized privately run enterprises (SME) to play an increasingly important role in China's economic growth in the following years.

To this end, a series of preferential policies are being drafted to support development of the country's myriad of SMEs, according to Wang Liming, vice-director of the SME Department under the National Reform and Development Commission.

The preferential policies will involve taxation, land use rights, loans, financing, employment, foreign trade and the expansion of Sino-foreign co-operation, Wang said.

"That means SMEs on the Chinese mainland will be able to enjoy many more preferential policies for development in the near future," Wang said.

And SMEs from Hong Kong and Macao special administrative regions will enjoy the same policies as their mainland counterparts, Wang added.

But Wang refused to give more details on the preferential policies that are tailored for the development of SMEs.

Addressing a press conference in Guangzhou, capital of Guangdong Province, on Tuesday, Wang said China is actually doing all it can to help SMEs expand.

He urged SMEs to seize the golden opportunities to further upgrade and to try to increase their presence in both domestic and international markets in the years to come.

Wang also urged SMEs to expand their investment in technical innovation to improve the quality of their products, build their own brand names and further raise their competitive capacity in the following years.

Wang urged provinces, municipalities and regions across the country to further improve the environment.

He hoped Chinese SMEs would be able to compete with State-owned enterprises, foreign-funded companies and joint ventures in the country's economic development in the future.

"China's SMEs can become even bigger and stronger through mergers, acquisitions and purchasing of stocks in the following months," said Wang.

Meanwhile, he encouraged Chinese SMEs to further expand co-operation with their foreign counterparts, expand their investments abroad, actively participate in international competitions and try to increase their presence in the world market.

Wang also promised the Chinese Government would spare no efforts to help SMEs overcome their difficulties in financing and development in the future.

Financial back-up

In April this year, China Banking Regulatory Commission has issued a notice to urge banks and other financial organizations in the country to change their mindsets about granting loans to SMEs, Wang said.

He hopes banks and relevant financial groups will establish a partnership strategy with SMEs and try to help SMEs settle their difficulties in financing and related fundraising events.

To this end, China Banking Regulatory Commission will organize a special financing fair during the Third China (Guangzhou) International Small and Medium Enterprise Fair (CISMEF) to help SMEs open multiple channels to raise funds.

A total of 62 banks and 40 finance groups have registered to participate in the special financing fair which has focused on offering financing services to SMEs.

They include 17 State-owned banks, 32 local banks and 13 overseas banks. The State commercial banks include Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and the overseas banks include Bank of America, Bank of East Asia, Heng Seng Bank and Hong Kong Shanghai Banking Co Ltd.

They will display their products and services at 220 standard booths to seek further expansion of co-operation with SMEs attending the CISMEF that takes place at Guangzhou Pazhou International Exhibition and Convention Centre from today till September 18.

And they have prepared a large number of special financial projects tailored for SMEs to help expand co-operation with SMEs and provide more and better financing services during the four-day event.

Wang hoped the co-operation between banks and SMEs will be a win-win deal.

Many banks have also promised to further simplify procedures for SMEs applying for bank loans in the following years.

Wang urged SMEs attending CISMEF to seize the opportunities to expand their co-operation with the big-name banks and financial groups from home and abroad.

He hoped banks and other financial groups would further lower their thresholds for SMEs to apply for loans.

By the end of June, the governments at various levels in China had successfully helped a total of 778,641 SMEs apply for bank loans.

And the loans granted to SMEs reached 2.64 trillion yuan (US$329.68 billion) in the first half of this year, up 141.23 billion yuan (US$17.65 billion) from the beginning of the year.

Shi Yibin, a senior executive from the Bank of China has promised to introduce more preferential policies to grant loans to support SME's development in the future.

Meanwhile, special seminars and lectures will also be organized during the event to help promote co-operation between SMEs and banks.

Senior economists, experts, bankers and government officials will give special lectures to managers and executives of SMEs on the development of SMEs and prevention of financial risks.

It is the first time that a special financing fair has been organized during the CISMEF.

Lin Ying, deputy secretary-general of Guangdong provincial government, also said the provincial government will do its best to support SMEs.

Lin is also deputy secretary-general of the Organizing Committee of CISMEF.

Guangdong, which borders Hong Kong and Macao special administrative regions, is accelerating construction of a credit guarantee system to help SMEs expand their financial channels in the future.

The southern province has become home to a great number of SMEs on the Chinese mainland. Its SMEs have played an increasingly important role in Guangdong's economic development in recent years.

By the end of June, Guangdong had registered more than 380,000 privately-run SMEs that have a total investment of more than 500 billion yuan (US$62.5 billion). Guangdong's SMEs currently employ more than 3.5 million people from around the country.