CBBC Insights | Levelling the playing field: a review of China’s SME Promotion Act

2017, January 24
CBBC Insights | Levelling the playing field: a review of China’s SME Promotion Act 24th January 2017
By Kirk Wilson
Executive Director
China-Britain Business Council
Life can be tough for SMEs in any market. Trying to make an impact whilst competing with big players is difficult enough, but add to that the challenges of getting payments from big clients, accessing global supply chains and ICT platforms, recruiting the brightest talent, managing bureaucracy and regulation, getting access to finance, and funding expensive IP defence and other legal remedies… A successful SME is truly something to admire.
China is no exception, but the good news is that the Chinese government recognises the benefits of greater market access for SMEs, and whether it’s supporting the Makers Movement, investing in innovation systems and industrial clusters, or regulatory changes, there’s lots of work going on to improve the situation.
SME Promotion Act
One ongoing piece of work is the SME Promotion Act, which China hopes will address some of the key challenges facing small companies, including small foreign owned companies, in the Chinese market. The latest iteration of the proposed rules includes a nationwide online registration system for movables financing to encourage financial institutions to provide non-fixed collateral financing (e.g. loans based on trade receivables) for SMEs; a standardised list of approved business administrative fees (a “positive list” whereby non-listed fees are prohibited); a dedicated SME rights protection organisation to enforce a proposed prohibition on SOEs delaying payment to small suppliers; a public procurement requirement to source more goods from SMEs; and the inclusion of SME related work in regional government work reports to establish a performance requirement.
It is hoped that these reforms will help to level the playing field for both domestic and foreign SMEs in China, and CBBC will continue to monitor and report on the impact.
CBBC support for SMEs
In addition to keeping an eye on changing industry trends and the impact on small companies, CBBC also has an extensive range of SME support available. In the UK we have a team of experts, a series of educational events, and the flagship annual SME China Forum to boost direct trade connections. In China we have an experienced team in 13 offices providing practical on-the-ground support including industry research and advice, networking and connections, and events management.
We also have a dedicated British Chamber of Commerce SME & Entrepreneur Forum in Beijing, and are the lead implementing partner for the Beijing-based EU SME Centre.
We have recently visited potential Chinese clients on behalf of small British companies to confirm the feasibility and sincerity of procurement; liaised with a major Chinese tendering platform to understand their fees structure to ensure a UK company was being treated fairly; researched potential scams that have been aimed at small UK exporters; and spoken to local customs officers to confirm standard procedures are being applied for small UK companies; in addition to hundreds of bespoke market research projects to identify potential partners and track niche industry trends.
Our Chinese government relations work also has specific SME focused activity and we recently renewed a longstanding agreement with the ProSME Centre of the PRC Ministry of Industry & Information Technology to continue actively supporting SME development, identify export opportunities, and improve SME2SME trade interaction.
If you’d like to learn more about CBBC’s support for small British companies entering the China market, please contact one of our experienced Sector Leads for more information.
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Kirk Wilson is CBBC Executive Director for the China region and principal expert on the ICT industry, based in Beijing. Contact him for further information: kirk.wilson@cbbc.org.cn.

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