SMEs as motor of growth: A review of China's SMEs development in thirty years (1978–2008)

Abstract

China's economic and enterprise reforms since 1978 have dramatically altered the structure and dynamics of its enterprises. One of the most remarkable changes during the entire reform process is the rapid growth of small and medium-sized enterprises (SMEs). By looking at its thirty-year development, the contribution provides a thorough review of China's SME since 1978. It illustrates that the development of Chinese SMEs followed a principle of pragmatism. It shows that while the progress has been strongly affected by government policies and regulations, the emergence and expansion of SMEs are closely linked with social and economic problems that occurred during economic transitions and institutional changes. The key factors that affect SME development are identified, especially relating to cultural and institutional influences. The opportunities and challenges for SMEs in the new economic environment are discussed with special focus on their integration in the global economy. The issues of management development in SMEs are examined generally and in the Chinese context. Although major problems may differ at each stage of the reforms, evidence shows an increasing importance of SMEs in China's transformation to both modernization and industrialization. Indeed, SMEs have become the driving power in China's socialist market economy.

The determinants of location specific choice: small and medium-sized enterprises in developing countries

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“…This trend is not only caused by large international companies in China, also Chinese SMEs, representing more than 99% of the Chinese companies [2], are increasing their import activities. Although official figures are sketchy and the definition of a SME in China is quite complex and depend on the industrial sector [3], Liu argues that up to 70 percent of all import and export activities are performed by SMEs [4]. Due to various problems as difficulties to access credits or limited technological and managerial capabilities [3], in comparison with larger companies they have other needs which in literature so far are often neglected.…”

“…Although official figures are sketchy and the definition of a SME in China is quite complex and depend on the industrial sector [3], Liu argues that up to 70 percent of all import and export activities are performed by SMEs [4]. Due to various problems as difficulties to access credits or limited technological and managerial capabilities [3], in comparison with larger companies they have other needs which in literature so far are often neglected. Apart from the fact that most studies mainly focus on large international companies, many studies have just analyzed the supply chains characterized by Western buyers and Asian suppliers (see e.g.…”