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With more and more multinational companies swarming into China, due to the country's rosy economic prospects, chances for China's SMEs to enter the multinational companies' worldwide industrial chain are expected to increase dramatically.

 

In 2005, 68.3 percent of China's export turnover was contributed by SMEs, especially in the fields of clothing, handicrafts and toys.

 

According to the China Entrepreneur Association, 450 Fortune 500 companies have investment projects in China, which provide more chances for Chinese SMEs to involve themselves in the multinational companies' worldwide industrial chain.

 

Commonly, the establishment of cooperation networks and mechanisms with SMEs is one of the key measures that multinational companies took to achieve their global strategy.

 

For cost-saving considerations, many multinationals are now starting to increase their collaboration with SMEs.

 

In a recent forum, Vice-Minister of the National Development and Reform Commission Ou Xinqian encouraged more Chinese SMEs to expand their businesses in the overseas market and try to establish cooperative relations with multinational companies.

 

Currently, China has more than 4.3 million registered SMEs.

 

In the country's eastern coastal areas, many export-oriented SMEs have formed industrial clusters, which makes it easier for multinational companies to outsource production.

 

Thanks to the country's increasing support towards the development of SMEs, China's privately-run SMEs have entered a period of fast growth. The country's non-state-run economy is displaying increasingly stronger growth.

 

Experts forecast that by 2010, non-state-run SMEs may generate 40 percent of gross domestic product in the industrial field, and contribute more than 60 percent of the nation's total employment. Following on from the developing trend, China will form a corporate ownership structure with large state-owned enterprises taking the lead and non-state-run SMEs forming the main body, thus creating a permanent driving force for sustained and fast economic growth.

 

As one of the efforts to support the development of SMEs, five state ministries and Guangdong provincial government joined hands to sponsor the third China International Small and Medium Enterprise Fair (CISMEF).

 

The fair has 5,000 exhibition booths, 20 percent of which have been booked by overseas exhibitors including 800 by Italian exhibitors.

 

It is being held from today to September 18 at the Guangzhou International Conference and Exhibition Center in Pazhou, Guangzhou.

 

Moreover, China Banking Regulatory Commission will organize a special financing fair during the event to help SMEs gain access to financing.

 

It is the first time that a special financing fair has been organized during the CISMEF that aims to build a platform for SMEs to overcome their difficulties in development and expansion.

 

A total of 62 banks and 40 finance groups have registered to participate at this special financing fair.

 

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

 

(China Daily September 15, 2006)