Santa's sleigh brings restored order to SMEs

Goldsun, a company targeted a 30 percent increase on sales revenue for this year, but now expects it will experience 10 percent growth at the most.

Shen added, that although the whole economic environment had dragged down production and sales volume of their products, the signs of recovery from the slump is getting them back to track.

Another key indicator, the HSBC PMI, an index that focuses more on small and medium-sized enterprises (SMEs), also showed an eight-month high of 49.5, in October.

"For the past three months, there are certain slight improvements in export volume, as the number of the orders from overseas is climbing back slowly with increasing demands preparing for Christmas," said Qian Shaotian, sales manager of Shanghai Yuanzong Hardware Co Ltd, which focused on trading hardware with mainly European clients in the last two decades.

Qian added that although the situation is getting better, the trading industry is not expected to recover rapidly in the coming year, in the face of tougher competition among local exporters which has worsened the trading environment, bringing lower profits, while the price of materials has risen.

Experts suggest the government should offer more assistance for SMEs to walk out of the miserable period as soon as possible.

"The economy's overall climate is getting better, although a great many SMEs are still struggling with the high cost of labor and materials, and sluggish demand," said Shi Jinchuan, dean of the Zhejiang University School of Economics.

Shi added that the government must continue to prioritize SMEs as they remained crucial to overall economic growth.

"Many policies being introduced are aimed at encouraging SMEs to find more ways to solve their own problems - that might be in brand rebuilding or cash flow, or upgrading their operational structures, for instance," said Shi.

Shi added that although certain SMEs are still struggling with the lack of orders and high expenses for labor and materials, the situation is getting better for the final quarter with more output of products to meet the increasing demands from abroad.

yuran@chinadaily.com.cn