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China helps SMEs tide over difficulties

(Xinhua)
Updated: 2008-12-06 12:33

Da'afu Baby Carriers Co. Ltd., a 500-member business based in east China's Shanghai Municipality, is also confident of pulling through the crisis.

"SMEs like ours cannot compete with big enterprises. We are not competitive in simply expanding outputs," said Yuan Fuxiang, board chairman of the company. "But we can focus on producing high-grade products with limited market demands, such as orders of two to three containers in volume, which big enterprises will not do. This is where our competitiveness lies."

These days, the company has cut most of its 100-product mix and focused only on three leading product varieties of game beds, umbrella vehicles and cloth beds. The company makes greater profits by improving products with higher added values, said Yuan Fuxiang, with more than 400 independent intellectual properties at hand.

"The export sector needs to make an overall industrial restructuring," said Xu Quanning, secretary general of Shanghai Toy Industrial Association.

According to Xu, only 20 percent of Chinese toy exporters have independent intellectual properties, which earn 20 percent to 30 percent profits. In contrast, 80 percent of toy makers are mere processing businesses, without any brands or core technologies, thus earning only 5 percent to 8 percent profits. "The latter enterprises suffer most in this financial crisis," said Xu.

"These enterprises must save themselves by industrial restructuring, despite the help of all sorts of preferential policies from the government," said Xu.

Industrial officials estimate the fourth quarter of this year and the first quarter of next year will be the most severe periods for Chinese SMEs.

"Within three to five months, Chinese SMEs will feel the relief from the nation's economic stimulus package as long as they hold onto their capital chain at present," said Li Zibin, CASME head.

"The world has six billion people and there is a market for 6 billion pairs of shoes. So long as we hold on, we will enjoy the market opportunities," said Teng Xingbiao, board chairman of east China's Wenzhou Fuluomi Shoes Co. Ltd., encouraging his more than 1,000 staff workers these days.

Teng's company produces 240,000 pairs of children shoes a month and exports them to Europe, the United States and Australia. The firm joyously received five foreign buyers in recent days. "We are building one more production line on the basis of the existing three. We are to meet difficulties head-on."

"We are also meeting pressures from rising costs and reduced orders. But each month, we will develop more than 100 models of shoes," said Teng. "We are to rely on product development and management to improve product quality and win the market."

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