China Business Sme

5201 Words21 Pages
China's market reforms and accession to the WTO has led to its economy growing rapidly, to the point where it is now the fourth largest on earth, and is expected to be in the top two within the next decade (Business Monitor International, 2006). As a result, China's SMEs are now facing an economy flooded with foreign capital, and with a more open economic climate than in previous years, but also a much more competitive economy, where many of their previous practices are no longer relevant. This piece aims to examine the effect of these changes on the strategies of Chinese SMEs by first examining the role of the SME in the economy, then analysing the strengths and weaknesses of the Chinese SMEs, and the opportunities and threats that have…show more content…
Potential Challenges and Opportunities Chinese SMEs face after WTO entry Following entry to the WTO, the Chinese government increased the level of protection and support it provided to the private sector and SMEs; this has led to many growth opportunities for SMEs, and made the private sector the most dynamic in the Chinese economy. Indeed, WTO membership has helped increase the speed at which the Chinese government has adopted a series of reform measures aimed at changing the country from a highly-centralized planned state to a socialist market economy. This has thus given SMEs an increased role: one that is socio-political as well as economic (Anderson et al. 2003). This has led to increased opportunities due to the large number of national and local newspapers and publishers that are arising from China's growing economy and importance on the world stage. Indeed, news reports, stories and articles about successful Chinese entrepreneurs and SMEs are frequently headline news in many local newspapers (Siu, 2005), which not only encourages further entrepreneurship, but also encourages Chinese citizens to use their local SME, ahead of foreign competitors. Indeed, one of the greatest opportunities available to SMEs following China's WTO reforms is that the Chinese state
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