China's small and medium-sized enterprises (SMEs) have recently been attracting more and more attention. The initial findings of a ten-month investigation by Dongfang Weiju Media were published in Beijing on August 3 in a report entitled A Third Source of Wealth Creation: China's Top 200 Fastest-Growing SMEs.
The study looked closely at 5,000 SMEs. It found that 462 of these had seen growth rates of over 30 percent for three consecutive years. It then went on to identify the top 200 fastest-growing SMEs among these 462 companies. Additional criteria for selecting the "Top 200" included: non loss-making, unlisted, turnover of 100 million yuan to 1 billion yuan and having their main business operations located in China itself.
Statistics from this investigation reveal the strength of the SMEs and show they play a significant role in the Chinese economy. Of the 1.346 million industrial enterprises in China, 99.8 percent are SMEs. They account for some 60 percent of gross industrial output, 57 percent of sales revenues, 60 percent of exports, and over 50 percent of GDP.
At present, China has 23.77 million small businesses run by individuals together with 2.43 million privately owned enterprises. The private sector now accounts for some 70 percent of retail sales of consumer goods with non-state-owned tills ringing up an annual 2,800 billion yuan.
The investigation also shows that in recent years, SMEs have established themselves across all industrial sectors.
In particular, they have achieved robust growth in eight industries. These are the real estate, automotive, iron and steel, chemical fiber, medical, electric power generation, communications, and financial industries.
However, in 12 traditional industries where SMEs once enjoyed rapid growth, they are now experiencing a slowdown as price competition intensifies with many similar products now on the market. These are the chemical, building materials, mining, food, beverage, agriculture, textile, garment, building, transportation, retail and home appliances sectors.
In newly emerging areas, such as the online games, media and entertainment industries, some SMEs may have made fortunes, but this is not reflected in a general growth of SMEs across these sectors. In recent years, a large number of SMEs have made an appearance in the high-tech industries, but have failed to achieve vigorous growth.
The investigation looked at SMEs from many quite different industries. However, some 90 percent of them acknowledged encountering difficulties in the same 17 areas. Prominent among these were problems in obtaining finance and in moving into global markets.
As Dongfang Weiju Media says, "For a long time, SMEs have been under-recognized as a powerful driver for wealth creation and so favorable conditions for their growth have not been created."
(China.org.cn by Yuan Fang, August 17, 2004)
