5.1 Economic Contribution
Currently, SMEs are an important part of China’s economy, and most of these enterprises came about in the last 15 years. With the opening up of China to market economy in the 1980s as part of the market-oriented
reforms initiated by Chinese leader Deng Xiaoping, private SMEs were finally recognised as vital to the country’s economic development.
The ensuing economic reforms involving state-owned enterprises SOEs in China, major SOEs rapidly changed into small and medium non-SOEs until the end of 2004. Meanwhile, more SMEs sprouted, spurred by
the implementation of non-SOE promotion policy. Since then urban collective enterprises, town and village enterprises TVE, alongside the private sector and self-employment activities, have been sprouting and thriving
all over China. In 2007 a total of 4,459 LEs accounted for 0.19 of the total number of enterprises registered in the country;
4,2291 MEs, or 1.78; and 2,327,969 SEs, or 98, of the total. Overall, SMEs made up for 99.7 of the total number of companies operating in China at the time. Business revenue of SMEs accounted for 60.42 of total
earnings, and SEs with 6.54 trillion, or 23.70. The industrial income of SMEs accounted for 66.28; with 11.77 trillion from SEs 37.29.
As in Indonesia, SMEs in China are also playing an increasingly important role in employment generation and hence declining unemployment in the country. LEs employed 20,877.8 thousand individuals, or 18.11 of the
total employment; whereas, MEs employed 35,464.3 persons 30.76, and SEs 58,947.8 persons 51.13. Based on regional distribution Table 9, 68.58 of SMEs are located in the eastern area part, 20.14 in the
mid-area, and 11.28 in the western part of China. SMEs in the top five provinces make up 48.4 of all SMEs.
These provinces are all located in the eastern area of China, namely, Jiangsu, Zhengjiang, Guandong, Shanghai, and Shandong, which accounted for 11.6, 11, 10.4, 9.9, 8.9, and 7.6 of all SMEs, respectively.
Table 9: Distribution of the incorporated SMEs by Region
Region Unitlegal unit
Employmentpersons worked Total
Beijing Tianjin
Hebei Shanxi
Inner Mongolia Liaoning
Jinlin Heilongjiang
Shanghai Jiangsu
Zhejiang Anhui
Fujian 2,327,969
98,674 55,807
87,605 49,637
22,053
110,081 32,418
40,790 207,535
270,669 241,220
59,902 77,230
58,947,778 1,470,505
1,024,926 2,696,972
1,477,966
606,530 2,323,698
816,716 1,027,397
2,892,309 6,563,781
5,705,517 1,758,246
2,151,462
14
51,682 57,720
230,474 33,473
7,836 34,683
75,330 19,134
29,160
851 45,906
23,879 4,693
4,693 18,648
957,281 147,402
1,143,975 2,138,436
647,977 837,651
37,834 1,173,463
677,594 141,599
141,599 340,509
Source: the data from the first national economic census.
By sector distribution, the business revenue of manufacturing industry accounted for 52.8, followed by the wholesale and retail 35.2; construction 4.6; and transportation and storage 2.6. Further, based on the
number of SMEs in the top three manufacturing industries, manufacture of general- purpose machinery leads with 9.2, followed by metal products 6.7, and textile 6.3. Table 10.
Table 10: Distribution of SMEs by Sector
Sector Unitlegal entity
Employment persons
Yearly business revenues mill.
Yuan Total
assets Total
Agiculture Mining
Manufacturing -food
-textile -wearing apparel,food ware and caps
-raw chemical material and chemical products -plastics
-metal products -general purpose machinery
-special purpose machinery -transport equipment
-electrical machinery and equipment Electricity, gas and heat power
Construction Transport, storage and post
Information transmission, computer service and software wholesale and retail trade
Hotel and restaurants Financial intermediation
Leasing and business services Scientific research, technical service and geologic prospecting
Management of water conservancy, environment and public fac. service to households and other services
2,327,969
4 77,891
1,228,354 68,154
77,944 47,569
72,459 69,400
82,028
112,752 54,713
51,576 56,889
34,041
107,186 59,702
1,703 819,054
3 4
15 5
2 1
58,947,778
76 3,024,762
38,325,314 1,553,258
3,191,356 2,532,159
1,961,833 1,826,806
2,210,821 3,011,552
1,497,445 1,512,932
1,746,124
666,073 7,157,427
2,089,113 59,190
7,625,545 12
118 47
28 58
- 6,535,425
3 220,728
3,612,196 214,453
307,665 150,835
239,781 201,139
226,891 328,035
152,095 149,955
193,540
42,347 436,184
160,921 6,175
2,056,859 1
8.9 0.5
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