China Competitiveness Of Smes Promotion Measures

With the gradual deepening of the opening and marketization of the national economy, competition has become the major environment where enterprises exist and develop and competitiveness has become the precondition and foundation. Especially after China's entry into WTO, the competition of national enterprises changed from completely domestic to international even global and a structure that for international firms competition turns localized while for domestic firms internationalized appeared. The small and Medium-sized Enterprises (SMEs), as an important part of our national economy, play a irreplaceable role in ensuring sufficient employment, absorbing surplus labor from countryside, stabilizing economy, resisting market volatility, maintaining competition vigor, creating new industries, filling the gap of the enterprises, providing coordination and supporting, improving economic structure and promoting a coordinated development of the economy.The development practice of the national economy in the past 30 years since China's Reform and Opening-up proved that the reason of the dynamic costal areas was those dotted SMEs. However, since this year SMEs especially in manufacturing industry have encountered unprecedented challenges from both inside and outside the country. The constant stream of the credit squeeze promulgated by the national government due to the mounting CPI makes their financing even more difficult The RMB exchange rate has appreciated more than 15% in total since its reform in June this year. And the oil price in the international market soared up to 140 USD a barrel. All those together with the climbing raw material prices and the Subprime Lending Crisis in the USA bring survival pressure to a lot of SMEs, which mostly depends on exportation and low costs. Therefore, the SMEs have to improve their ability to start a secondary undertaking and promote their resources and elements to perform the transition from labor-intensive to capital- and technology-intensive, then information- and knowledge-intensive. Otherwise the SMEs' advantage in structure may turn into disadvantage.This thesis proposes that technological creativity and brand strategy are the two core factors for the SMEs to advance their competitiveness. Based on these two, the government should take into consideration of the characteristics of SMEs & local conditions and exercise the force of system innovation & market guidance to strengthen the credit system construction & property rights protection, to energetically develop the tertiary industry & socialized service, to accelerate the transition of economic growth mode and provide favorable outer conditions for the SMEs' sustainable development.