Credit guarantee system helps SMEs grow
By Zheng Caixiong (China Daily)
Updated: 2004-07-28 11:22

Guangdong Province is accelerating the construction of a credit guarantee system to help privately-run small-and-medium-sized enterprises (SMEs) expand their financing channels.

Guangdong Province Communist Party Deputy Secretary Ou Guangyuan said the provincial government would try to improve the environment for SMEs to aid their future expansion.

The province's move aims to help its myriad of SMEs overcome their financing and development difficulties.

Ou remarked that SMEs have played an increasingly important role in Guangdong's economic development in recent years.

Guangdong had registered a total of 353,000 privately-run SMEs by the end of June, employing 3.3 million people.

The southern Chinese province, which borders the Hong Kong and Macao special administrative regions, registered a total of 75 guarantee companies by the end of June, an increase of 18 compared with figures at the end of 2002.

These companies had offered guarantees for local SMEs to apply for government and bank loans valued at more than 15.18 billion yuan (US$1.84 billion) by the end of June.

Ou told a work conference on SMEs in Guangzhou yesterday that SMEs would mainly be encouraged to be involved in the export-oriented, high-technology, agricultural products processing industries and set up companies that mainly recruit laid-off workers.

The provincial government would invest more than 5 billion yuan (US$602.41 million) in five years to help SMEs conduct technological restructuring and construct privately-run industrial development zones.

And priority will be given to the SMEs in the province's rural areas.

Ou also encouraged SMEs to actively participate in international competition.

Guangdong has 94 SMEs that have established firms and joint ventures overseas, with a total investment of US$93.28 million.

The Administrative Bureau of SMEs under the Guangdong Provincial Economic Commission has issued a circular to ban random inspections and collection of extra fees from SMEs in order to further safeguard their legal interests.

The bureau will try to help local SMEs apply for operating licenses and relevant certificates needed to start production and trade.

Guangdong SMEs have a total registered investment of over 470 billion yuan (US$56.76 billion).

And the SMEs contributed a fixed asset investment of 75.5 billion yuan (US$9.11 billion) in the first six months of 2004, a year-on-year increase of 24 per cent.

Export volume from SMEs hit US$7.78 billion between January and June, up 87.5 per cent year-on-year and accounting for 9.4 per cent of the provincial total.

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