Center links firms with foreign partners

Shanghai's small enterprises hub proves a boon to entrepreneurship

As China's government seeks to open up the economy and ease it away from leaning on state-owned heavy industry and a massive manufacturing base, the role of small and medium-sized enterprises has become more important.

Opportunities are springing up for many companies, established and new, but equally, many are struggling to cope with the rapidly changing economic landscape.

Nowhere is this more evident than in Shanghai. The city may be the regional headquarters of more than 1,000 multinational corporations, but it is also home to 340,000 SMEs. They represent 96.7 percent of all business in town and are responsible for providing 54.6 percent of job opportunities.

No wonder then that support for SMEs has long been recognized as vital. But now it is more crucial than ever as many find themselves pushed against the proverbial wall by rising costs, dwindling overseas orders and the relentless appreciation of the yuan, all sapping their confidence and competitiveness and eroding their profit margins.

Help and support for SMEs has arrived in various forms from local and central government. One that is getting results is the Shanghai Small Enterprises Center and its associated incubator programs.

The center, set up in 2011 by the Shanghai municipal government, is proving particularly resourceful in linking local small companies with foreign business.

Since he became head of the international cooperation office at SSEC to meet the soaring demand from SMEs for a global presence, Dai Jie has been putting in a lot of overtime.

Home to about 500 SMEs, the center currently oversees 50 industry associations in Shanghai and handles several exchange programs for Chinese and foreign companies every week.

"We try to link local small companies with their international counterparts in the hope that efficiency, energy and creativity will blossom," Dai says.

So far, more than 100 firms have benefited from the exchange platform, either getting special funds or locating foreign partners.

One such company is Shanghai Guangyu Automobile Air Conditioning Compressor Co. Established in 2002 by veteran car engineer Dong Rongyong, the family-owned company wants to build a homegrown brand of automobile air conditioning compressors.

Dong, a former employee at the State-owned Shanghai Automotive Industry Corp, realized that even a company as big as SAIC was failing to master leading compressor technology, leaving the domestic market firmly controlled by foreign manufacturers.