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After the struggle, hopes rise for biz recovery

By CHENG YU | CHINA DAILY | Updated: 2022-06-20 09:02
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Visitors check the booth of Changzhou Hengfeng Special Conductor Co Ltd, a small-scale high-tech enterprise in Jiangsu province, at an expo in Shanghai. Premier Li Keqiang said MSMEs are a key underpinning for steady economic growth. CHINA DAILY

Meanwhile, according to a document jointly released recently by the MIIT and 10 other ministries, the country will also boost the full integration of all spheres of SMEs and large companies operating in industrial and supply chains as well as in the big data sector, so as to harness synergies.

The document said a new ecosystem of enterprises of all sizes will be developed. It will be characterized by coordination, efficiency, integration and smooth operations, and shore up industrial and supply chains.

The document proposed guidance for large enterprises so that they would share their design and development abilities and open up their equipment and laboratories to smaller counterparts. It also called for large companies to offer smaller businesses free access to project libraries and databases, and match their industrial chains to advance the integration process.

Peng Huagang, secretary-general of the State-owned Assets Supervision and Administration Commission of the State Council, said at a recent news conference that centrally administered State-owned enterprises have already played a big role in helping MSMEs cope with difficulties.

An increasing number of central SOEs are adding more MSMEs to their supplier lists. For instance, half of the 188 domestic suppliers to Shanghai-based Commercial Aircraft Corp of China now are MSMEs.

Yang Yuanqing, chairman and CEO of Lenovo Group, said established companies, including the information technology giant, should play a bigger role in driving the joint innovation and development of SMEs in the upstream and downstream segments of industrial and supply chains.

SMEs account for 44.5 percent of Lenovo's industrial chain, and the company will offer them help such as financing and marketing resources, especially for those with core technologies.

In May, the SME Development Index, based on a survey of the performance of 3,000 businesses, decreased marginally from the previous month to 88.2, narrowing the downtrend. But subindexes for construction, transportation and postal services and wholesale all showed an increase from a month ago.

The proportion of companies resuming work increased in May by 2.2 percentage points compared with the previous month. More than 20 percent of companies fully reopened their business while 14.3 percent of them reopened 75 percent to 100 percent of their business.

In an interview with China Daily, a company executive in charge of a smartphone component manufacturer in Shenzhen, Guangdong province, said if the factory stopped production for one week, gross income would shrink by 2 million yuan, with net loss exceeding 300,000 yuan.

"But I'm more worried about losing customers," said the company executive, who declined to be named. "If I stop, clients will definitely find other companies to manufacture their goods. It's difficult to acquire a new customer, but it's easy to lose one."

Wang Peng, associate professor at the Hillhouse Research Institute at the Renmin University of China in Beijing, said the Chinese economy will continue gathering momentum if the private sector, including smaller businesses, remains sound, given that many MSMEs are being increasingly recognized for their role as leaders in new concepts and new business models.

"In reality, they tend to become vulnerable to external pressures. In addition to those pressures, these companies still need more to boost their core competitiveness to become irreplaceable on the global stage over the long term," Wang said.

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