SMEs say business runs on the brink

Despite Central government has rolled out special measures to support SMEs development, but many SME owners still complain business is now worse than that in the global financial crisis in 2008.

A recent survey on 3,000 SMEs in Guangdong's manufacturing heartland, conducted by an e-commerce firm and the National School of Development at Peking University found that 72 per cent of SME owners in the Pearl River Delta say they cannot maintain the profit or even suffer small losses in the next six months, while 3.3 per cent expect to go bankrupt.

rnSMEs reported average profits had shrunk by 30 to 40 per cent from last year.

With rising material and labor costs, SMEs cannot sustain profits by building stronger brands and using better technologies.

72 per cent of respondents said the big problem is caused by rising cost.

It is suggested that the government should reform the interest rate system so that more loans could be provided to SMEs with higher credit ratings.

SMEs should focus on cost control and developing competitive products for the domestic market.

Now many cases revealed that heavily indebted business bosses from Wenzhou, Zhejiang province did not pay workers’ wages and shut down their factories or close down the business and went abroad or hid.

SMEs can find some outlets on e-business websites since they could find more business opportunities on B2B portals, then they can contact the international buyers directly and cut cost largely.

IBUonline is a B2B portal, dedicated for helping foreign trade business. SMEs may find some business opportunities there.