The Development of Small and Medium-Sized Enterprises: New Environment, New Problems, and New Countermeasures

Research Team of DRC

Preface

Small and medium-sized enterprises (SMEs), which play a major role in vitalizing the economy, creating jobs, promoting innovation, increasing tax revenue and benefiting the people, are a significant force for the development of economy and society. However, because of a smaller size, weaker competence and poorer ability against risks, they need support from government, society and other sectors. Under the new circumstances of pursuing scientific development and building a harmonious society, to promote development of small and medium-sized enterprises holds more strategic significance. In February 2011, the Development Research Center of the State Council launched a major research project on "The Development of Small and Medium-sized Enterprises: New Environment, New Problems, and New Countermeasures". The project team was headed by Zhang Yutai (former President of DRC) and Hou Yunchun (Vice President of DRC) was deputy head responsible for the comprehensive and systematic research on issues and policy options relating to the development of SMEs. The research team rallied some key staff members of DRC in this field, including Chen Xiaohong, Ma Jun, Li Zhaoxi, Li Guoqiang, Ma Shuping, Wang Jicheng, Wang Huaiyu and Jia Tao from Enterprise Research Institute, Lin Jiabin from Research Department of Social Development, Zhang Chenghui from Research Institute of Finance, Wang Wei and Liu Tao from Institute of Market Economy, Zhang Junwei from Department of Macroeconomic Research, Li Zhijun from Department of Techno-Economic Research, Wei Jigang from Research Department of Industrial Economy, Zhang Liping from Research Department of Foreign Economic Relations, and Wang Hui and Lai Youwei from the General Office. Chen Xiaohong was leader of the research team, Ma Jun the coordinator, and Ma Ping, Wang Huaiyu, and Jia Tao the contact persons.

This research project focuses on those small and micro-enterprises among SMEs, giving priority to field survey as well as analysis of deep-seated reasons for problems and paying attention to drawing on international experience as well as making feasible and practical policy advice. To have a precise understanding of the new environment and problems facing the development of SMEs, members of the research team made field surveys in Liaoning, Jiangsu, Zhejiang, Hubei, Guangdong, Sichuang, and Guizhou provinces, held over 20 meetings and discussions with officials as well as experts and scholars from the provincial, municipal and county level governments and relevant institutions, made exchanges with businessmen from over 100 SMEs, and collected a host of first-hand materials. In order to get a deep understanding of policies concerning development of SMEs, members of the research team also held discussions with people from the Ministry of Industrialization and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, the Ministry of Human Resources and Social Security, the Ministry of Commerce, People's Bank of China, State Administration for Industry and Commerce, and China Banking Regulatory Commission. Besides, the research team made studies on overseas companies like the Tokio Marine & Nichido Fire Insurance Company Limited and the Temasek Fullerton Financial Holdings so as to draw on financing experience of foreign SMEs.

The team made studies on 11 sub-topics as follows: research on the development conditions of SMEs, research on the system of policies and laws and regulations for SMEs, research on SME financial services, research on fiscal and taxation policies for SME development, research on problems relating to SMEs' labor, employment and social security, research on SMEs' service system, research on technological progress and transformation and upgrading of SMEs, research on SMEs' market access and the relationship between small, medium and large-sized enterprises, research on problems in SMEs' global operation and related countermeasures, research on development of micro enterprises requiring government support, and research on international experience for promoting SMEs development. A comprehensive research report was made on the basis of integrating, summarizing and refining research findings gained in all the above-mentioned sub-topics. Research findings had been submitted in various forms to leading officials and related government departments for reference, and received high concern from these departments. This book includes a comprehensive research report as well as research reports on different sub-topics.

During the research work, the Ministry of Industrialization and Information Technology offered assistance in many aspects. Local Development Research Centers from Jiangsu, Zhejiang, Hubei and Guangdong provinces, the Provincial Administrations of SMEs of Liaoning and Jiangsu provinces, governments of Wuhan, Chengdu, Guangzhou, Guiyang, Wuxi, Ningbo and Zaoyang rendered kind help to coordinate the work of the research team, and a large number of SMEs provided valuable information, opinions and suggestions for the research. Members of the research team would like to give their heartfelt thanks to all of them. Development of small and medium-sized enterprises is an issue arousing high concern by all countries, and it requires long-term research and exploration to identify solutions suitable for a country or region in addressing relevant problems. This research is accomplished within merely four months. It is hoped that readers will not spare their comments on any flaws and deficiencies of this book.

Contents

The General Report：The Development of Small and Medium-sized Enterprises: New Environment, New Problems and New Countermeasures

1. Significance for the development of SMEs

2. Development achievements made by SMEs

3. SMEs development still face many difficulties

4. It is worth drawing on international experience for promoting SMEs development

5. SMEs development face new opportunities and challenges

6. Policy Options for further promoting SMEs development

Chapter 1: The status quo, environment and problems facing SMEs development

1. Status quo of China's SMEs development

2. New environment facing SMEs development

3. Some major issues facing SMEs development

4. New requirements for developing SMEs

Chapter 2: The system of policies, laws and regulations for SMEs

1. The system of policies and laws and regulations for promoting China's SMEs development has been gradually formulated

2. The system of policies, laws and regulations for promoting China's SMEs development is inadequate

3. Advice for further improving the system of policies, laws and regulations for promoting China's SMEs development

Chapter 3: SMEs' financial services

1. Analysis on effects of related policies for improving SMEs' financial services in recent years

2. Analysis on factors influencing enhancement of SMEs' financial service level

3. Inspirations from successful international cases

4. Policy options for further improving SMEs' financial services

Chapter 4: Fiscal and taxation policies supporting sustained development of SMEs

1. Present fiscal and taxation policies for promoting SMEs development

2. Major outcomes

3. Main problems

4. Tax burden on SMEs remains heavy

5. Improve fiscal and taxation policies to support sustained development of SMEs

Chapter 5: Issues relating to SMEs' labor, employment and social security

1. The new environment of and new problems relating to labor, employment and social security of SMEs

2. Main problems and reasons relating to SMEs' labor, employment and social security at present stage

3. Suggestions and countermeasures

Chapter 6: Main problems and policy options for the development of China's SMEs' service system in the new era

1. Key progress in China's SMEs' service system building

2. Main problems in China's SMEs' service system building

3. International experience relating to SMEs' service system building

4. Significance of improving SMEs' service system in the new era

5. Approaches to and policy options for improving China's SMEs' service system

Chapter 7: Technological progress as well as transformation and upgrading of SMEs

1. The status quo and problems of SMEs' technological progress as well as transformation and upgrading

2. Main efforts made by related departments for promoting technological progress as well as transformation and upgrading and the effects

3. Policy options

Chapter 8: Issues relating to SMEs' market access and the relationship between small, medium and Large-sized enterprises

1. Various market access obstacles facing SMEs at different development stages

2. The pattern of effective labor division and coordination between large enterprises and SMEs is not yet formed

3. Analysis of reasons and policy options

Chapter 9: Problems relating to SMEs' internationalized operation and countermeasures

1. The status quo, features and problems relating to SMEs' internationalized operation

2. The new environment facing China's SMEs' internationalized development and the influence

3. International experience relating to government support for SMEs' internationalized development

4. Build a policy system supporting China's SMEs' internationalized development

Chapter 10: Devote major efforts to supporting development of micro enterprises

1. Attach high importance and give strong backing to the development of micro enterprises

2. A scientific definition of micro enterprises

3. Organizational features, forms and types of micro enterprises

4. Main problems facing China's micro enterprise development

5. Measures adopted by foreign countries for promoting micro enterprise development

6. Suggestions for supporting micro enterprise development

Chapter 11: International experience for promoting SMEs' development

1. Attach high importance to the status and role of SMEs

2. Formulate scientific and effective SMEs standards

3. Establish efficient government administrative system and service system

4. Scientific and appropriate policy system for SMEs

5. Combine various measures to promote SMEs' development

Chapter 12: Experience and inspirations drawn from three countries in Southeast Asia relating to financial services for SMEs

1. Government-backed support for SMEs' financing

2. Commercial banks in service of SMEs develop rapidly

3. SMEs' credit requires professional business models

4. China could draw relevant experience from three countries' development in Southeast Asia

References