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Analysis of the impact of the financial crisis on the development of small and medium-sized enterprises

Abstract: This article systematically analyzes the impact of the financial crisis on the development of small and medium-sized enterprises in China from two aspects: difficulties and opportunities. The following conclusions are drawn: The financial crisis has caused China's small and medium-sized enterprises to face a sharp drop in export orders, a shrinking export market, rising production costs, declining output, reduced production scale, serious bankruptcies, reduced credit support, narrowed direct financing channels, and increased financing costs. Wait for difficulties. However, in the financial crisis, small and medium-sized enterprises are also facing opportunities such as global industrial transformation and upgrading, China's policies to expand domestic demand, active fiscal and tax financial support, and talent introduction. In the face of difficulties and opportunities, small and medium-sized enterprises should actively expand domestic demand markets, explore overseas markets with less impact from the crisis, strengthen internal financial management, expand financing channels, and optimize talent introduction and management mechanisms.

Keywords: small and medium-sized enterprises; financial crisis; difficulties; opportunities

0 Introduction

Small and medium-sized enterprises refer to the number of employees below 2,000, or sales of 300 million Enterprises with total assets of less than RMB 400 million [1]. At present, the average annual output of small and medium-sized enterprises accounts for more than 60% of China's GDP, and the number of employees accounts for more than 80% of the country's total employment [2]. The impact of the global economic and financial crisis triggered by the U.S. subprime mortgage crisis on China is still spreading, and small and medium-sized enterprises have been particularly severely affected. This article systematically analyzes the impact of the financial crisis on the development of China's small and medium-sized enterprises from two aspects: difficulties and opportunities, with a view to providing a reference for Chinese small and medium-sized enterprises to explore ways to deal with the crisis.

1 Difficulties faced by small and medium-sized enterprises

1.1 Exports have been severely affected

1.1.1 Export orders have dropped sharply. According to customs statistics, from January to August 2009, China's foreign trade exports were US$730.74 billion, a year-on-year decrease of 22.2%. The overall export price fell by 5.6%. After deducting price factors, the export quantity fell by 17.6%. The contribution rate of the decline in export quantity to the decline in export value was 79.3%. Among them, the general trade export price It fell by 0.4%, and the export quantity fell by 24.9%; the export price of processing trade fell by 6.4%, and the export quantity fell by 15.5%. During the same period, the import price of general trade fell by 22%, and the import quantity increased by 4%; the import price of processing trade fell by 6.1%, and the import quantity dropped by 21.5%. The 105th Canton Fair*** attracted 160,000 overseas buyers, a decrease of 5.2% compared with the previous session. The export turnover was US$26.23 billion, a decrease of 16.9% compared with the previous session. Traditional labor-intensive products such as mechanical and electrical products, light industrial products, textiles and clothing are greatly affected by the shrinking international market.

1.1.2 Shrinking export market Under the influence of various factors such as increased trade barriers, reduction of export tax rebate rates, and continued appreciation of the RMB, the traditional foreign trade model of China's small and medium-sized enterprises has been tested. First, it faces competitive pressure from countries such as India and Vietnam. Although the industrial supporting facilities of countries such as India and Vietnam are not as good as those of China, their labor costs are lower than those of China. Feedback from the 2009 Canton Fair showed that as production costs rise, there is a clear tendency for small and medium-sized enterprises to lose foreign trade orders to Southeast Asian countries, especially in industries such as textiles and clothing, handicrafts, and toys. The second is the pressure for RMB appreciation. According to statistics from the People's Bank of China, from January 2008 to September 2009, the value of one U.S. dollar in RMB (end of period) increased from 7.1853 to 6.8290. For small and medium-sized enterprises in the field of textile and apparel, processing profits range from 5% to 10%. The appreciation of the RMB has seriously affected corporate exports, further compressed profit margins, and continued to weaken price competitiveness. Some companies prefer not to accept orders for more than two months. Exports to major export markets have further shrunk. According to customs statistics, from January to August 2009, China’s export prices to the United States fell by 4.4%, and the export volume decreased by 13.5%. The decline was 0.5 percentage points deeper than in the previous seven months, and was smaller than the export volume in the same period. The overall decrease was 4.1 percentage points, which was smaller than the 9.5 percentage points and 8.4 percentage points reductions in exports to the EU and Japan respectively. During the same period, the export price to the EU fell by 2.7%, and the export quantity decreased by 23%; the export price to Japan increased by 2.2%, and the export quantity A decrease of 21.9%.

1.2 Production costs remain high

1.2.1 Production costs continue to rise due to the U.S. subprime mortgage crisis, rising prices of raw materials such as iron ore, oil, and grain, the appreciation of the RMB, and the national macroeconomic Affected by regulatory policies and other factors, the growth rate of China's small and medium-sized enterprises has further slowed down, and the survival and development of small and medium-sized enterprises are facing severe challenges. The rise in raw material prices has a relatively large impact on corporate costs, causing a substantial increase in corporate production costs. Among them, the prices of some raw materials such as steel and petroleum products have risen too fast. In addition, the internal control of small and medium-sized enterprises is not perfect and the procurement costs are relatively high, causing the production costs of enterprises to rise significantly. The production equipment and production technology of small and medium-sized enterprises are relatively backward, resulting in excessive production consumption and serious waste of resources. This is also an important reason for the increase in production costs of small and medium-sized enterprises.

1.2.2 Decline in output The increase in production costs and labor costs has caused the profits of small and medium-sized enterprises to continue to decline, and the decline in profits has caused the output of enterprises to show a downward trend. According to a survey, the national industrial added value in November 2008 increased by 5.4% year-on-year, the growth rate hitting the lowest year-on-year growth rate since 1994. The average index of orders, production, and profits of Guangdong's industrial enterprises in 2008 was 110.7, 101.1, and 100.0 respectively, down 20.8, 21.5, and 20.3 points from the previous year.

1.3 The scale of production continues to shrink

1.3.1 The scale of production shrinks. The financial crisis has caused the export market of small and medium-sized enterprises to continue to shrink. In addition, the production costs of small and medium-sized enterprises have increased, and the development of small and medium-sized enterprises has been seriously affected. impact. Huizhou Geelong is known as China's "Shoe Capital" and is currently the largest women's shoe production base in the country. There are thousands of shoe factories in Jilong Town, and there are more than 100 large-scale enterprises. In addition, many are small factories. Nearly one-third of small factories have now completely shut down, and those that are still operating are also facing the problem of insufficient operating capacity.

1.3.2 The phenomenon of bankruptcies is serious. According to statistics, 67,000 small and medium-sized enterprises or above went bankrupt nationwide in the first half of 2008. As a representative of labor-intensive industries, more than 10,000 small and medium-sized enterprises in the textile industry have closed down, and two-thirds of textile enterprises are facing restructuring. According to statistics from the Small and Medium Enterprises Bureau of the Guangdong Provincial Economic and Trade Commission, from January to September 2008, a total of 7,148 small and medium-sized enterprises in Guangdong Province had suspended production, ceased operations, closed down, and transferred. As of October 2008, this number had risen to 15,661.

1.4 Insufficient liquidity

Capital constraints and financing difficulties are problems that have always plagued enterprises, and this problem became more prominent in 2008. Taking Guangdong Province as an example, according to statistics from the Service Industry Survey Center of the National Bureau of Statistics, in 2008, the corporate financing and liquidity prosperity index of Guangdong Province was lower than the same period of the previous year in each period. The financing prosperity index fell from 103.3 in the first quarter to four quarters. 93.3 in the quarter; the liquidity prosperity index fell from 115.2 in the first quarter to 101.6 in the fourth quarter; although interest rates were lowered in the second half of 2008 and governments at all levels also introduced relevant policy measures, judging from the current situation, the positive policies The effect has not yet appeared; among small and medium-sized enterprises in the fourth quarter, 31.1% and 31.9% reported financing difficulties and tighter liquidity respectively, while only 10.7% and 18.9% reported easier financing and sufficient liquidity respectively.

2 Opportunities faced by small and medium-sized enterprises

2.1 Industrial layout adjustment and policy opportunities

2.1.1 Opportunities for global industrial transformation After the full-scale financial crisis broke out, the world economy There are objective requirements for readjustment of the development pattern. From the perspective of the manufacturing sector, the current global manufacturing industry is mainly concentrated in the three major regions of North America, Europe and East Asia. Among them, the East Asia region is represented by China, Japan and South Korea. Since the 1990s, China's economy, which is dominated by manufacturing, has made great progress. Its proportion in the global manufacturing industry has increased from 3% to 13.2% in 2007. It occupies an important position in the world and has become the world's largest economy after the United States. The second largest manufacturing country. The financial crisis objectively accelerated the downturn in the manufacturing industry in Western countries and brought a historic opportunity for the development of China's manufacturing industry.

At present, although China's macro-economy is also facing a cyclical downward trend, the prosperity of the manufacturing industry remains at a high level. Therefore, in the adjustment of the industrial structure after the financial crisis, China should strengthen its position as a manufacturing center.

2.1.2 Opportunities for global industrial upgrading From the perspective of opportunities for the development of China’s manufacturing industry, the economies of developed countries (regions) such as the United States, the European Union, and Japan will fall into recession or be on the verge of recession after being hit hard by the financial crisis. The national manufacturing industry is bound to accelerate its transfer to developing countries, which will bring historic opportunities for the growth and upgrading of China's manufacturing industry. In particular, China's tax system reform represented by consumption-based value-added tax and a series of industrial transformation policies will definitely bring unprecedented opportunities to the development and independent innovation of China's small and medium-sized enterprises, creating new opportunities for China's industrial upgrading and corporate product upgrading. Chance.

2.1.3 Policy opportunities for China to expand domestic demand. The State Council executive meeting held on November 5, 2008, studied and deployed 10 measures to further expand domestic demand and promote stable and rapid economic growth, and launched a package of construction and economic development plans with a total investment of more than 4 trillion yuan. The central government’s decisions and the implementation of policies and measures to expand domestic demand will definitely bring huge development opportunities to the development of small and medium-sized enterprises.

2.2 Opportunities for fiscal, taxation and financial support

2.2.1 In terms of fiscal policy, firstly, the 2009 National Document No. 36 will temporarily defer the payment of social insurance premiums or reduce the rates of small and medium-sized enterprises in difficulty. The policy implementation period was extended from the original end of 2009 to the end of 2010. Small and medium-sized enterprises can negotiate with employees on wages, working hours, and labor quotas, and can apply to the local human resources and social security department to implement comprehensive calculation of working hours and irregular working hours; second, the central government has established a technological innovation fund for small and medium-sized enterprises in science and technology. International market development funds, special subsidy funds for small and medium-sized enterprise service systems, special funds for small and medium-sized enterprise development, etc. By the end of 2008, the central government had allocated a total of 20.85 billion yuan in special funds to support the development of small and medium-sized enterprises. On the basis of 3.9 billion yuan in 2008, it increased to 9.6 billion yuan in 2009 and will gradually increase in the future. In addition, the National Development and Reform Commission has allocated 3 billion yuan of the 20 billion enterprise technological transformation funds specifically for the technological transformation of small and medium-sized enterprises, especially small enterprises. Guofa No. 36 stipulates that the establishment of a national small and medium-sized enterprise development fund should be accelerated to guide the investment of social funds. The establishment of the fund is currently under study. Third, in order to reduce the burden on enterprises, the relevant departments of the State Council canceled and stopped collecting 100 administrative fees nationwide in 2008, including administrative protection fees for agricultural chemical products, which can reduce the burden on enterprises and society by about 19 billion yuan each year.

2.2.2 In terms of tax policy, the new corporate income tax law implemented in early 2008 reduced the corporate statutory tax rate from 33% to 25%, and levied a low-end tax rate of 20% on qualified small and low-profit enterprises. High-tech enterprises that need key support from the state are subject to a reduced tax rate of 15%. Since 2009, the state has implemented value-added tax transformation reform nationwide. Enterprises are allowed to deduct the input tax included in newly purchased equipment; the value-added tax collection rate for small-scale taxpayers has been uniformly reduced from 6% and 4% to 3%; since August last year, the export rebate rate has been increased seven times. On this basis, the 2009 Guofa No. 36 document also proposed that in 2010, small and low-profit enterprises with an annual taxable income of less than 30,000 yuan will be levied a half income tax; small and medium-sized enterprises that really have difficulty paying urban land use tax can apply for It stipulates that applications for tax exemptions and reductions should be submitted; small and medium-sized enterprises that cannot pay taxes on time can also apply for deferred payment in accordance with the law. 2.2.3 Financial policy The 2009 State Council Document No. 36 proposed a series of policy measures. The first is to institutionally require state-owned commercial banks and joint-stock banks to establish specialized institutions for small business financial services to strengthen and improve financial services to small and medium-sized enterprises; the second is to accelerate the establishment of loan companies, village banks, mutual funds, etc. with small and medium-sized enterprises as the main lending entities. The development of new small and medium-sized financial institutions supports the participation of private capital in initiating the establishment of joint-stock financial institutions and improves the multi-level financial service system for small and medium-sized enterprises.

The third is to encourage financial institutions to expand loans to small and medium-sized enterprises, encourage the establishment of small business loan risk compensation funds, provide appropriate incremental subsidies for small business loans issued by financial institutions, and provide appropriate risk compensation for the losses of small business bad loans; the fourth is to improve The property mortgage system and loan collateral identification methods alleviate the problem of insufficient collateral for small and medium-sized enterprises through movable properties, accounts receivable, equity, etc.; fifth, implement differentiated regulatory policies for commercial banks. Sixth, in terms of improving the credit guarantee system for small and medium-sized enterprises, increase financial support, improve the guarantee capabilities of guarantee institutions, and implement policies that exempt qualified guarantee institutions from business tax, reserve withdrawals, and pre-tax deductions for compensatory losses. According to statistics from the four major banks, as of the end of October this year, the balance of loans to small and medium-sized enterprises was approximately 5.8 trillion yuan, an increase of 1.3 trillion yuan compared with the beginning of the year, with an average increase of approximately 43%. The balance of small and medium-sized enterprises loans was 1.2 trillion yuan, an increase of 286 billion yuan from the beginning of the year.

In terms of broadening financing channels for small and medium-sized enterprises, relevant parties have taken a number of measures to explore diversified financing channels for small and medium-sized enterprises. First, actively develop the listing and financing of small and medium-sized enterprises. On the basis of expanding the scale of the small and medium-sized enterprise board, the launch of the GEM was accelerated. The second is to support financial institutions in carrying out pilot projects of loan securitization for small and medium-sized enterprises to build diversified direct financing channels for small and medium-sized enterprises. The third is to standardize and promote the development of the property rights trading market. Select Beijing, Shanghai, Guangzhou and other places to carry out pilot projects for regional small and medium-sized enterprise property rights trading markets, and guide them to provide services for small and medium-sized enterprise property rights, property rights, equity, debt and other transactions. The fourth is to actively promote collective bond issuance by small and medium-sized enterprises. Beijing, Shenzhen, Dalian and other provinces and cities have successfully issued collective bonds for small and medium-sized enterprises, with a total issuance of 1.82 billion yuan. The fifth is to establish and improve the entrepreneurial investment mechanism. Through tax incentives, financial support, venture capital guidance funds and other measures, various venture capital institutions are encouraged and guided to increase investment in small and medium-sized enterprises.

2.3 Talent introduction opportunities

From the perspective of enterprises attracting talents, although large enterprises have the advantage of attracting talents, small and medium-sized enterprises also have their own characteristics in this regard. First, the huge organizations and command systems of large enterprises restrict the activities of scientific and technological talents. The larger the enterprise organization, the more likely it is to become rigid and difficult to make original suggestions; secondly, because of its relatively small scale, small and medium-sized enterprises have a relatively simple organizational structure and few management levels, so it is easy to make timely adjustments in the face of changes in the economic situation; thirdly, From the perspective of employee self-development, SMEs may be more attractive than larger enterprises. According to survey data from the China Development and Reform Commission and the Ministry of Education, the proportion of fresh college graduates employed in small and medium-sized enterprises has exceeded 50% in recent years. This has improved the past few years when the number of college graduates in small and medium-sized enterprises was relatively low, and the educational level of employees was generally low. situation, this provides the human resources needed for small and medium-sized enterprises to a certain extent.

3 Countermeasures and Suggestions for the Development of Small and Medium-sized Enterprises

3.1 Expand the Domestic Demand Market

Facing the shrinking export market, small and medium-sized enterprises should strengthen the expansion of the domestic market and find new domestic demand market space. China's mid- to low-end markets have great development potential, such as the rural consumer market. Looking for new opportunities on the Internet, they turned to e-commerce, which is also one of the growth points that companies can quickly find.

3.2 Exploring overseas markets with less impact from the crisis

Guangdong is a major export trade province in China. From January to April 2009, Guangdong Province’s top three export markets—Hong Kong, Exports to the United States and the European Union continued to decline, while exports to emerging markets such as the Middle East, Africa, and India maintained growth. Guangdong's exports to the Middle East performed outstandingly, with a substantial increase of 25.6% in April 2009; exports to ASEAN and India also increased by 2.7% and 8.6% respectively; exports to Africa decreased by 2.1%. Therefore, small and medium-sized enterprises should explore the African and Middle Eastern markets that are relatively less affected by the financial crisis.

3.3 Strengthen internal financial management

Small and medium-sized enterprises should track customer production plans and inventory plans in a timely manner, reasonably determine their own procurement and production plans, and use price strategies or trade exchanges to transfer excess inventory. Inventory liquidation. Collect accounts receivable or transfer accounts receivable to reduce financial pressure. Reduce business operating costs through layoffs, salary reductions, and outsourcing of some functional tasks. Reduce procurement costs.

Reduce production consumption and improve product quality. Professional collaboration and increased investment in high-tech equipment.

3.4 Expand financing channels

Small and medium-sized enterprises should seize the government's preferential policies in credit guarantees, loan interest discounts, direct financial support, etc., transform and upgrade in a timely manner, optimize product structure, and rely on technology Innovate and improve product added value. Small and medium-sized enterprises should pay attention to maintaining their own image, strengthen communication and collaboration with banks, and rely on honesty and credit to obtain bank loan funding. Small and medium-sized enterprises in the industrial supply chain can obtain bank loans and realize "supply chain finance" by relying on the credit of large enterprises with which they have business dealings. Several small and medium-sized enterprises enter into financing alliances, establish mutual guarantee systems, and provide mutual guarantees, or organizations similar to cooperative operations, collective loans or joint issuance of corporate bonds. In addition, financial leasing, hardware operating leasing, product financing, option and equity financing, OEM financing, deposit financing, patent, trademark and other intangible asset pledge loans, equity incentive plans, attracting equity financing, etc. are also effective ways for small and medium-sized enterprises to finance.

3.5 Optimize the talent introduction and management mechanism

Small and medium-sized enterprises should give full play to their advantages such as flexible systems and mechanisms, responsiveness to the environment, and large development potential, exploit their strengths and avoid weaknesses, and establish a flexible introduction, selection and employment mechanism. , incentive and restraint mechanisms, reasonable talent flow and other talent strategies that are consistent with its own characteristics. By scientifically allocating human resources, enterprises will be able to attract and retain talents. The first is to create a "people-oriented" corporate culture; the second is to strengthen performance appraisal management and establish an effective incentive and competition mechanism; the third is to use guarantees to retain talents and use training to develop talents; and the fourth is to do a good job in corporate recruitment.

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