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China Daily Website

Entrepreneurs emboldened by new leadership's growth pledge

Updated: 2012-12-17 23:09
By WANG YING, YU RAN and WU YIYAO in Shanghai ( China Daily)

Businesspeople in various industries said they were encouraged by the promise of great opportunities in the statement issued on Sunday by the central government summing up the main points of the Central Economic Work Conference over the weekend.

"We're encouraged by the government's pledge to create new growth by emphasizing domestic consumption and deepening economic reforms," said Chen Jun, deputy president of the Zhejiang Chamber of Commerce, in Beijing.

Entrepreneurs emboldened by new leadership's growth pledge

Workers at Fujian Jinjiang Aojin Knitting & Garments Co Ltd. Small and medium-sized enterprises are in dire need of financing due to rising costs and narrowing profit margins, experts said. PROVIDED TO CHINA DAILY

The conference, held at the end of every year since 1994, is seen as China's top-level economic meeting and a time for stretching out economic plans for the country in the following year.

Chen told China Daily that the statement is consistent with the 18th National Congress of the Communist Party of China report on the topics of driving up domestic demand and urbanization.

"Urbanization and rising domestic consumption will be able to drive the development of the property market, especially industrial property development," Chen said.

According to Chen, China's third- and fourth-tier cities have huge potential for such development.

"More supportive policies and attractive investment conditions are needed to unleash this potential," he said.

China's economy has slowed for seven consecutive quarters. This has dealt a serious blow to enterprises that manufacture mainly for export to the United States and Europe.

Shi Dingwei, general manager of Ningbo Matrix Sport Goods Co Ltd is one of the numerous Chinese entrepreneurs feeling the pinch.

"We have seen a 30 percent drop in overseas orders, and we are planning to promote our own brand in the domestic market," Shi said.

Seeing little future as an original equipment manufacturer of products designed and contracted for by foreign customers, Shi's snowboard company started developing its own brand products to sell to markets including South Korea.

His efforts are beginning to pay off, and he's already planning to establish a sales network in the domestic market.

"This gave me the confidence to make more self-branded products. Growing in the domestic market is every businessman's dream," said Shi.

To help make his dream come true, Shi said he will have to devote more resources to improving design and quality to establish a trusted brand among domestic consumers.

Zhang Bin, general manager of Shanghai Solid Stainless Steel Products Co Ltd, said: "Making our own brand products and ensuring their high quality has been the main element for me since I started to develop domestic sales."

His company's exports are due to increase around 15 percent year-on-year in 2012 as its clients are mainly high-end brands which haven't been affected severely by the global economic crisis.

Wenzhou Dongyi Shoes Co Ltd, a mid-scale exporter that has experienced a decline in overseas demand over the past year, is expected to see negative growth in profits from its export trade due to the gloomy global market but increased domestic sales this year.

"We've realized that being an original equipment manufacturer is no longer a wise way to make money from overseas markets, so that's why we're currently trying to raise our brand's domestic profile," Chen Xi, manager of the company, said.

In addition, his company has tried to cut labor and materials costs and expand its domestic sales by moving some production lines inland to Chengdu, Sichuan province.

"We've got a factory and an office in Chengdu to meet the increasing demand from central and northern cities," said Chen.

Meanwhile, commercial banks will provide credit to capital hungry small and medium-sized enterprises.

"For entrepreneurs like us, it is not easy to get loans approved, because we don't have many assets. Much of our business is driven by ideas, but if we don't have enough money, we won't realize the ideas and keep the business running," said Zhang Yijun, manager of a graphic design service provider in Shanghai.

Zhou Dewen, chairman of Wenzhou SME Development Association, said small and medium-sized enterprises are in dire need of financing due to rising costs and narrowing profit margins.

As the number of orders from both overseas and domestic customers has declined, only a small number of businesses can make ends meet if they have no steady financing channels, said Zhou.

A number of domestic banks have already introduced financing services catering to the specific needs of SMEs.

Shanghai Pudong Development Bank introduced a loan service that may allow businesses to get loans of up to two times of the value of their assets on a mortgage, according to the bank.

Ding Mingquan, chief executive officer and president of Fujian Jinjiang Aojin Knitting & Garments Co Ltd, said he was greatly impressed by the practical style of the new leadership.

"I'm confident the new leadership will provide more support to help our small and medium-sized enterprises cope with difficulties," Ding said.

Contact the writers at wang_ying@chinadaily.com.cn

 
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