The number SMEs in China hit 42 million

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There are 42 million small and medium-sized enterprises within China, including individual industrial and commercial households, making up 99 percent of the total number of enterprises according to the People’s Daily. They report that the ultimate value of goods and services that have been rendered by SMEs is approximately 60 percent of the GDP.

Ou Xinqian, vice minister of the State Development and Research Commission, introduced the development situation of China’s SMEs at news conference held by State Council Information Office, and also expressed that China has always attached importance to the development of SMEs and actively supports them. He said that SMEs are also the main driving force for technological innovation.

Currently the SMEs have produced sixty-five percent of China’s invention patents and eighty percent of new product development. SMEs continually improve the level of the nation’s openness to the outside world; the proportion of SMEs labor-intensive product exports, including clothing, textiles, toys and shoes, reached more than 90 percent of all exports.

China will continue to promote growth of domestic SMEs while foreign SMEs looking to enter the Chinese market will need to take into consideration new regulations like the unified corporate income tax when entering the market. Because they generally have less cash flow, and less to fall back on, international SMEs can get into hot water pretty quickly in China if they don’t adhere to some basic China business principles. China Briefing wrote all about SMEs back in July of 2004, and in that issue, we produced the ten commandments for operating an SME in China:

  1. Thou shalt conducteth due diligence on thy potential China partner
  2. Thine engineers aren’t lawyers, Taketh professional advice over contracts elst thy be smitten with great woe
  3. Thou shalt not be arrogant and assume that because thou hast previously set up factories elsewhere thy knowest the tribulations of China’s Heavenly Middle Kingdom
  4. Thou shalt remember grand banquets and the evil perils of the demon Mao Tai are seductresses designeth to parteth a fool from his money and ye shall resist such temptations
  5. Thou shalt continueth thine good business practice thou hast learnt at thy home dwelling place and not fall prey to the false idol of “China is different”
  6. China coveteth thy intellectual properties, copyright protecteth them
  7. Thou shalt dot thy I’s and crosseth thy T’s, small mistakes canst lead thy partner into temptation of taketh advantage of thine naivety
  8. Thou shalt hire a proven company manager to runneth thy plant and not leaveth it in the hands of those who thou not knowest
  9. Thou shalt pay close attention to thy purchasing department and monitoreth them closely lest they fall into temptation and buy from their siblings at double market rate
  10. Thou shalt remembereth ‘profits repatriation’ as homage to thine heavenly parent and not forgetteth this lest wrath be incurred with wailings and knashings of teeth by thine board of directors.