SMEs Call for More Financial Support

“Those Small and medium enterprises (SME) with feasible projects can apply for the national technology innovation fund，” said Qu Dongsheng， director with Project Consultation Department of the China High-tech Industrialization Association， at the Second China’s SMEs Finance Investment Seminar on Aug. 18 in Beijing.

Qu also explained the application notice which deserves attention and gave some examples for the better understanding of the SMEs in attendance.

Project matchmaking and road shows were carried out during the 2-day seninar. Entrepreneurs or representatives from the SMEs showcased their projects， and the experts gave their analysis and comments in response.

The seminar was held against the backdrop of the harsh living conditions of SMEs in China. SMEs， which contribute to 60 percent of China’s industrial output and create 80 percent of the country’s jobs， have faced an unprecedented crisis this year. Shortages of electricity， capital and labor have led them to this predicament， and the soaring costs have made things worse， Xinhua reported.

The report carried a survey and found out among the 60 small businesses and 10 industry associations in the costal provinces of Zhejiang， Fujian and Guangdong， as many as eight out of ten companies said they are suffering from operating difficulties more than ever before.

Profits have tumbled in the Pearl River Delta， where small businesses cluster. Companies are complaining about tough operating conditions， which many believe are even worse than the onset of the latest global financial crisis. Labor-intensive companies such as textiles， clothing， furniture and bag manufacturers are the first to be affected， according to the report.

Therefore， rumors are spreading that a supposed wave of bankruptcies has swept China’s SMEs. But it is still early to say so. Recently it is not a matter of fact. Officials from both the central and local governments have rebutted the rumors.

“I can assure you it’s not true that a large number of China’s SMEs are going bust，” Zhu Hongren， chief engineer and spokesman for the Ministry of Industry and Information Technology(MIIT)， was quoted as saying by the report.

However， several SMEs have faced difficulties such as a lack of legal financing channels， excessive increases in raw material prices and increased costs for labor and financing， Zhu added.

SMEs， which are looking for investment for the projects they believe feasible， are also confronting with various problems.

“Capital comes first when we are seeking for project matchmaking. Sometimes， there is a lack of efficient communication between us and the investors，” Sun Jianhua， general manager of Sichuan Huawei Biological Intelligence Technology Co.， Ltd. based in Southwest China， told China’s Foreign Trade.

“At present， we technologic SMEs still face financing dilemma. Foreign funds are abundant， but complicated in the long-term financing procedure， thus affecting the project progress. While， the domestic funds request equity investment， for which we do not have advantages despite intellectual property and ownership of the project，” Shi Jinlan， general manager of the Gansu Meiyu Zaixian New Energy Technology Ltd. in Northwest China， told our reporter.

“We hope the government gives personalized support for the good projects of SMEs. The innovation fund of RMB 500， 000 is far from enough，”added she.

Financing is not only the problem. Still， SMEs are facing complicated procedures during the financing.

“I hope my technology to be industrialized at an early date， but I can not find relative industry leaders. And the approval procedures is too complex to endure as an individual，”said Chen Haiqiang， who was presenting his new technology which can raise power output in water conservation.

Ding Quan came with his patent technology of eco-friendly multipurpose flood discharge， which he believed was helpful for soil and water conservation， reduction of flood damage， increase of economic values.

“Though many investors have shown interest， their operation model is a bit inconvenient for me. We wish for more support in project appraisal， project approval， investment policy and RD funds，” said Ding.

Fortunately， the central government is mulling new policies to support SMEs. China will continue to tighten its monetary policy in the second half of this year， but more funding will go to small businesses， the China Securities Journal reported recently.

The Chinese government will unveil a series of measures to support the development of SMEs in the second half， said the report.