| Chinese small and medium sized enterprises (SMEs) experienced remarkable development since China's reform and opening policy to the outside world, especially in the private sector. As statistics show that China presently has about 8.2 million SMEs, with about 1.15 million are self-employed, takes 99.5% of the whole registered enterprises in China. In 2003, the final product and service of SMEs account for 55.6% of the national GDP, 62.3% of the export value and 46.2% of the tax. In addition, 65% of the patent, above 75% of the technical innovation and 80% of the new product come from SMEs. Because of all these contributions, SME development has become a critical strategy for the whole nation and draws focused attention from the Central Government.Therefore, how to promote and accelerate the development of Chinese SMEs becomes an important topic. In order to achieve this, we should first recognize the existing gaps in SME development. In regard of number and contribution, China is a large SME country, but not a strong SME country. There are still a lot of constraints and challenges for sustainable development of SMEs in China, such as: lack of formal financing channel, inadequate resource of information, difficulty in employing high quality management and technical talent, as well as fail to explore into the new market, ineffective marketing channel and lack of good business environment, and so on. Therefore, corresponding measures of support are recommended in the areas of: (1) strengthen the cooperation with local financial institutions to increase the access to finance for SMEs; (2) create a smooth information channel to improve the asymmetry information; (3) provide various kinds of training and consulting services for management and technical skills improvement; (4) take actions in institutional capacity building and business environment improvement to ensure the effectiveness of market and competition mechanism.As deepening of China's reform and opening policy to the outside world, and broadening of the gap between regions, more and more international organizations and NGOs start to enter into China's interior area and western market to provide poverty alleviation, women related, education, financing and technical assistance services. The funding of these international organizations and NGOs comes from donor countries and other governmental trust funds. These organizations are more focused on supporting technical assistance in a particular area, and are more and more conscious of sustainable development of SMEs in recent years. Following the trend, the International Finance Corporation (IFC) of the World Bank Group gradually moves its strategic focus to China. As a result, the China Project Development Facility (CPDF, now renamed as PEP-China) was established in 2001 to provide technical assistance support to Chinese SMEs, which is another important business line other than IFC's traditional investment services in China.Before IFC-CPDF's operation, the technical assistance projects of other international organizations and NGOs in China are relatively scattered and independent. IFC is the private sector arm of the World Bank Group, with the objective of promoting private sector economy in developing countries. It is the first time that IFC establishes a complete supporting system for private sector and SMEs in China through its Beijing Office's investment services and CPDF's technical assistance services in Sichuan. In general, IFC's services include project investment, syndication, financial sector investment (for banks, insurance companies, leasing companies, venture capital funds, etc), consulting service such as privatization, institutional reform and technical assistance support to government and enterprises. Geographically, IFC's services cover the whole China, with particular focus in Sichuan and other Western Provinces for technical assistance project.The establishment of CPDF is a milestone of a complete supporting system by IFC for Chinese private SMEs. At the same time, technical assistance services are unique feature that differentiate IFC from other international finance organizations, with evidenced results of: integrating the supply and effective utilize of funds from SME perspective; providing incentives and techniques to broaden access to finance for private sector SMEs from perspective of bank and financial institutions; recommending appropriate suggestions and measures to improve the business environment for SMEs from government and policy making perspective. Such a complete operational system is a successful trial to kick off China's page following IFC's experiences in Africa and other Asian and European Project Development Facilities, and this trial will definitely in turn to add a wonderful chapter to the IFC's global technical assistance network.This doctorate dissertation is to study the impact of IFC's technical assistance support which supplements its investment services for Chinese SMEs, and how to achieve sustainable development of technical assistance services in China. The study is based on the challenges and constraints Chinese SMEs are facing, especially in the Western regions, and the core of the research is focused on IFC's technical assistance services in Sichuan Province. The dissertation wishes to probe into a sustainable development path for Chinese SMEs based on the analysis of the success stories and lessons learnt from the first five-year operation of CPDF's technical assistance projects, and provide valuable reference and experiences for other international organizations and NGOs.The dissertation is divided into seven chapters with two to four sections for each chapter. Chapter One is the Introduction, explains the background and significance of the subject, the study on relative topic from both domestic and abroad, train of thought for study, study methodology, innovative points and the areas for improvement. Chapter Two is the related theory to support the World Bank Group and IFC's technical assistance for SME development. Based on the objectives of the World Bank Group and IFC, and from the perspectives of contribution on the economy and employment by SMEs and from social, political and justice impact, the chapter summarizes the important theories on SME development support by the World Bank Group and IFC. Further more, it also elaborates that the bias on policy and distort in the market are the springboards for technical assistance support on SMEs, thus explicates the SME strategy and focus of the World Bank Group and IFC. All the above provide the theory foundation for latter summary of IFC's technical assistance support on Chinese SMEs and the creation of the new technical assistance development model. Chapter Three elaborates the general situation and characters of Chinese SME development, and the technical assistance support on Chinese SMEs by the IFC in the field. Chapter Four analyses the effect and impact of IFC's technical assistance support based on the constraints of Chinese SME development, elaborating how IFC's technical assistance support benefits Chinese SMEs and the weakness of existing technical assistance projects. Therefore set up a base for the creation of the new development model for SME technical assistance. Chapter Five is the extension of Chapter Four, which emphasizes the importance of technical assistance for Chinese SME development from the perspective of IFC's global experience and practice in China. Chapter Six analyses the adjustment of IFC strategy on technical assistance in China and points out the problems may occur in real implementation and areas for improvement from a pragmatic point of view. Chapter Seven is the conclusion and summary of the whole thesis, in which a new technical assistance development model - "Resource and Market Integrated Technical Assistance Model Linked by Local Vendor" - is created to serve the sustainable development target of Chinese SMEs.This study major involves the following six innovative points:1. The study is carried out from the point of view of the technical assistance support for SMEs, which is the rare field being studied by the existing SME development research. Hope the result of this kind of innovative study could bring valuable supplementation to the SME development theories.2. The study is based on the technical assistance practice for Chinese SMEs by the International Finance Corporation, which is from the unique angle of international organization and donor country. The characteristics of non-profitable organization and global network of resources, experience and expertise make them focus on the real impact of the project and sustainable development of the SME technical assistance support, instead of the short-term profit of the project.3. The study emphasizes to exploit the sustainable development path for Chinese SMEs from practical demonstrations, so bunches of first-hand materials and data accumulated would be valuable for further research on SME development.4. Various lessons, experiences and measures taken summarized by the study on technical assistance practice by the International Finance Corporation in China could make good reference for many other international and nongovernmental organizations that have the willingness to support Chinese SMEs.5. Many studies, surveys and researches involved in this study are either organized or participated by the author, and the conclusion and experience are summarized by the author, all of which would further support and promote the author's practical work.6. The "Resource and Market Integrated Technical Assistance Model Linked by Local Vendor" has been bought forward by the author from the result of both practical working experience and several years' study, which is the feasible model to support SMEs by international and non-profitable organizations in China. It's characteristics could be demonstrated by: local market and client-oriented methodology overcomes the weakness of lacking pertinence by the product from non-profitable organization, thus ensures the effective utilization of resources; the emphasize on the linkage of local vendor buildsthe local capacity, promotes the affinity of the product as well as greatlyreduces the cost; and the most important point is that the model tries to lookfor a successful "exit" for the international organizations after bringing inrelevant resources, technical support and expertise, which is the mostdifficult problem of "exit channel" for technical assistance project.During the research and composition of this dissertation, I received a lot ofcoach and guidance from my tutor Professor Li Tiande, assistance and support frommy classmates and friends, and support from my company the International FinanceCorporation. Therefore, I would like to take this opportunity to express my mostsincere thanks to all of them and all their help and support! Limited by my studylevel and experience, I recognize that there are many areas in this dissertation needto be improved, such as collection of raw materials, analysis of related theories,textual research on suggested model, and especially on demonstration computation,etc., for which I hope I can receive corrections, instructions and suggestions from allof you! I will work even harder on it to further upgrade both my study level andpractical experience to reciprocate my tutor and university, and also contribute backto the society!...
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