Better credit access and new rules are not enough, say scholars and businessmen Guangdong's small and medium-sized enterprises (SMEs) have won improved access to capital and will soon have their own regulatory environment, but they still want more assistance, academic and business sources say. Liu Huanquan, director-general of the province's Small and Middle Enterprise Bureau, said 64 credit guarantee agencies with an average registered capital of 90 million yuan had been set up in 2003, the bureau's first year of operation. The national registered capital average is 20 million yuan. In the first half of this year, more than 20 credit guarantee agencies were set up to help ease the credit crunch. On the regulatory front, the provisional private enterprises rule, which has been in the making for more than a year, was aimed at meeting the specific needs of Guangdong SMEs, of which 60 per cent are privately owned. Another significant measure would be the first China Small and Medium Enterprises Fair in Guangzhou from October 18 to 22, during the break between the two sessions of the Chinese Export Commodities Fair, Mr Liu said. Yet although the past 18 months have seen an unprecedented amount of support for SMEs from the party and government, scholars and businessmen feel that it has not been enough. 'It is true that there are many credit guarantee agencies now, but they are still not solving the funding problem at the root,' said Chen Shiren , a researcher at the Guangdong Academy of Social Sciences. 'Access to credit is still the most critical problem facing SMEs.' Credit guarantee agencies did not have adequate capital backing to serve the needs of the 700,000 SMEs in the province, so Mr Chen suggested that the government either give them financial support or set up a re-guarantee system. 'The best way would be to have more privately owned banks, but this is held up by the need for policies and a supervision system.' But not all SMEs are concerned about funding difficulties. The Tong Brothers Garment Factory is more worried that the government is not moving fast enough in implementing policies. 'The government is aware [of the need to help SMEs], but this is not enough. It has to take action,' said the company's general manager, Tong Yongye . 'We are facing pressure from India. If India rises, it will grab our manufacturing industries. We should also watch out for emerging Southeast Asian countries like Indonesia and Malaysia.' Another businessman, Liang Ruitian , said that while he had benefited from the mainland's economic reform policies, he still had no confidence in the government. 'We are using our own resources to expand. If we have the funds we will grow bigger. If we don't, we will stay small. The key is to not work for the government, not to rely on the government and to have as little to do with the government as possible,' he said.
