The country's small- and medium-sized enterprises (SMEs) are facing increasing difficulties this year and need more support from the government, an SME executive said at a forum in Beijing yesterday.
The SMEs are facing unprecedented difficulties in paying back their loans before the Spring Festival because of cash flow problems, said Lin Lanfang, chairman of Huzhou, Zhejiang Province-based Silk Road Holding Group.
Lin said the profitability of the manufacturing industry is very low and many manufacturing SMEs across the country have closed their factories and invested in other businesses in order to gain quick profits.
The government should provide more flexibility to the SMEs without too many policy restrictions, and help with professional talents and business information, Lin noted.
The SMEs have accounted for 80 percent of urban employment. Lin said a stable development of the SMEs will contribute to social stability.
After Premier Wen Jiabao visited Wenzhou, Zhejiang Province in October, the government has announced a number of measures to alleviate SMEs' difficulties.
In the latest move, the Ministry of Finance and the Ministry of Industry and Information Technology announced Friday that authorities should set aside at least 30 percent of their total procurement budget for the SMEs.
"But such measures will only help in the short term, and long-term solutions are still needed," Zhou Dewen, head of the Wenzhou Small and Medium-sized Business Development and Promotion Association, told the Global Times yesterday.
Zhou noted that it is not so easy to change the current situation of the SMEs and the government needs to regulate private lending and avoid high interest rates on loans.
"If a company can constantly innovate, it can also be successful irrespective of government support," Yang Fan, an economics professor at the Business School of China University of Political Science and Law, said yesterday.
"SMEs should also focus on internal management improvement to enhance their ability to compete with other companies," Liu Jincheng, chairman of a high-tech firm, Beijing Hiconics Drive Technology, told the Global Times yesterday.
