China Economic Information Service (CEIS, affiliated with Xinhua News Agency):

In recent years, China has paid increasing attention to and offered greater support for SMEs, and more and more SMEs have reached a consensus on following a development path characterized by specialization, refinement, uniqueness and innovation. As a leading department of the State Council in promoting the growth of SMEs, how does the MIIT view this phenomenon? What supportive measures will be taken to tackle the difficulties facing SMEs?

Xu Xiaolan:

Thank you for your questions. General Secretary Xi Jinping said, "SMEs can make great achievements," and stressed many times that we should work unswervingly to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector, which motivated a large group of enterprises featuring specialization, refinement, uniqueness and innovation. The annual Central Economic Work Conference and government work report always make plans to promote the growth of SMEs. In the past decade, under the strong leadership of the CPC Central Committee, China has provided unprecedented support for SMEs, rolling out a host of policies with higher value than ever before. The system and mechanism driving the growth of SMEs are continuously being improved, the business environment is being significantly optimized, and the concept of SMEs focusing on specialization, refinement, uniqueness and innovation has taken root in people's minds. The core competitiveness of China's MSMEs has significantly increased, contributing greatly to the country's economic and social development. This can be seen from the following three main aspects.

First, SMEs have grown rapidly. By the end of 2021, the total number of enterprises nationwide reached 48.42 million, 2.7 times that in 2012. Among them, over 99% were SMEs. In the industrial sector, the number of China's SMEs above designated size reached 400,000, operating revenues exceeded 75 trillion yuan and total profits reached 4.7 trillion yuan, up 23.5%, 38.7% and 37.1%, respectively, compared with 2012.

Second, SMEs have made great contributions. Data from the fourth national economic census showed that the number of people working in SMEs accounted for 80% of the total number of employees. In 2021, the total number of people working in China's private sector reached 400 million, about 200 million more than in 2012. Private firms, mainly MSMEs, are the largest foreign traders in China, contributing more than 58.2% to the growth of foreign trade in 2021. Research shows that the correlation coefficient of SMEs and regional economic growth exceeds 0.8. Regions with SMEs actively engaged in business are also the popular locations for job hunting and have witnessed greater economic development.

Third, SMEs have demonstrated vitality. Taking the development path of specialization, refinement, uniqueness and innovation has been a distinctive feature of SMEs in China in recent years. More than 60% of little giants are engaged in the basic field of industry, over 70% have been deeply immersed in industry for more than 10 years, more than 80% have entered strategic emerging industrial chains, and over 90% are experts supporting well-known large enterprises at home and abroad. The average R&D intensity of little giants has reached 10.3%, which is 1.8 percentage points higher than that of listed companies. Therefore, it is fair to say that SMEs featuring specialization, refinement, uniqueness and innovation boast a strong capacity in innovation, have great growth potential, and play an indispensable role in strengthening, completing and stabilizing industrial chains.

Only if SMEs prosper can China's economy maintain sound momentum. Going forward, the MIIT will continue to implement preferential policies in a comprehensive way, make full use of various means, and do everything possible to help MSMEs overcome difficulties. We will support them to keep raising their innovation ability and professional level and ensure the stability of these market entities, in an effort to lay a solid foundation for the stability of China's economy. 

Thank you.

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