BEIJING, October 8, 2022 /PRNewswire/ — By Rev. from Beijingsee : On January the 21st10 days before the Spring Festival holiday (from January 31 to February 6 this year), the workshops of Baoji Saiwei, a heavy machinery manufacturer in Baoji, Shaanxi Province to the northwest China, are in full swing to complete their orders. By the end of 2021, Saiwei had already received its orders for the first half of 2022. Deputy General Manager Lihui Told Beijing Review, “We need to deliver products on time and explore new markets.”
That same day, in the capital of beijingDu Peifan, founder of ZhiqingFin, an artificial intelligence (AI) company specializing in intelligent voice services, was doing his routine job guiding his employees through a checklist to serve their banking customers.
The next day, January 22in Yiwu, known as the world’s largest consumer goods wholesale market in the eastern province of Zhejiang, Wei Lingying, CEO of OMAWine International, a Spanish wine and food importing company, is busy taking and delivering orders. Wei even had a hard time sneaking into this Beijing Review interview.
Although they operate in different sectors and play individual roles in the market, all three are part of the most robust component of the Chinese economy: small and medium-sized enterprises (SMEs).
China SMEs, which account for approximately 99% of all businesses in the country, are the main force behind China economic and social development. According to a 2020 report by the Ministry of Industry and Information Technology, more than 50% of national tax revenue and 60% of GDP come from SMEs. They create 70% of technological innovation and 80% of urban employment.
However, these companies face many difficulties and worries about their future development.
Alive and healthy
COVID-19 surges, rising commodity prices, supply chain issues, and funding difficulties, among others, pose daunting challenges.
Rising wine and food import spending combined with a drop in demand due to the pandemic has put OMAWine International on edge. Compared to the pre-pandemic period, wine orders fell 20% during the sales season leading up to the Spring Festival this year, according to Wei.
On the positive side, the three companies are still alive, inspiring those who wish to embark on entrepreneurship.
Saiwei only halted production for a brief period at the very onset of the COVID-19 pandemic in early 2020 and quickly resumed operations. “Like the gears, we are the inseparable parts that ensure the rapid functioning of China industrial and supply chains,” Li said. “We, SMEs or private companies, couldn’t just give up and close up shop; we are not only businesses, but also the economic backbone of our workers’ families.”
Trials and Tribulations
SMEs usually congregate in competitive industries, which forces them to adjust their business models and actively find new growth opportunities in the new market environment, Zhang said.
Compared with large smart speech companies that only provide one standard product, ZhiqingFin’s customized services are better, especially in after-sales, according to Du. The pandemic has generally spurred technological expansion, with AI now being widely applied. Yet funding remains a problem. It is a difficult task for Du to increase the company’s funding to invest in technology capacity and service research.
Pan Gongsheng, deputy governor of the People’s Bank of Chinathe country’s central bank, said at a press conference in September 2021 meeting the financing needs of SMEs is a priority on the regulatory authority’s agenda. Loans to micro and small enterprises totaled 17.8 trillion yuan ($2.75 billion) lately July 2021up 29.3% year on year, according to Pan.
High-tech SMEs like Saiwei also receive financial assistance. Unlike regular companies producing heavy machinery, Saiwei caters to specific customer needs. Last year he invested around 30 million yuan ($4.7 million) in research and development.
The company has been inducted into the Little Giant Firms program, covering small businesses in their early stages of development, all focused on high-end technologies. This could bring Saiwei millions of yuan in research support over the coming year. Du’s company also applied for the program.
So what does the future hold China SME? The answer is twofold: innovation-driven development and green development will be two key thrusts to promote their high-quality growth during the 14th Five-Year Plan period (2021-25), according to a government directive.
SOURCE Beijing Review