SMEs driving economic progress in Guangdong

Over the past five years, Guangdong province in South China has become a fertile land for the private economy, as evidenced by the steady rise in the number of small and medium-sized enterprises contributing to its socioeconomic development.

From 2018 to 2022, the number of SMEs in the province increased from just over 3.8 million to more than 6.8 million, and local official data indicate Guangdong now accounts for more than one-tenth of China's total business entities of SMEs.

The province has issued a series of policy measures to promote high-quality development of its SMEs and the private economy, according to local officials.

"Several indicators have achieved historic breakthroughs, highlighting the importance and contribution of SMEs and the private economy to the economic and social development of the province," a local official said.

"They play an important role in stabilizing growth, promoting innovation and benefiting the livelihood of the people," he added.

Over the past five years the added value of Guangdong's private economy mainly consisting of SMEs increased from 4.83 trillion yuan ($678 billion) to 6.98 trillion yuan, with an average annual growth rate of more than 5 percent. Its proportion in the province's overall economy has increased to 54.1 percent, accounting for more than half the total.

The official said SMEs in Guangdong have been vital to developing the province's industrial chain as their innovation capabilities have improved. To date, the province has cultivated 867 national-level "little giant" businesses — the novel elites of SMEs that specialize in a niche market — and 18,946 provincial-level SMEs that use special and sophisticated technologies to produce novel and unique products, all of which rank among the top in the country.

About 87 percent of the provincial-level SMEs are engaged in manufacturing and more than 95 percent belong to Guangdong's 20 strategic industrial clusters, playing an important supporting role in such key areas as new materials, 5G new-generation information technology, new energy, integrated circuits, artificial intelligence, high-end numerically controlled machine tools and robots.

"SMEs have constantly increased their social contributions, effectively improving people's livelihood and promoting common prosperity," the official said.

From 2018 to 2022, SMEs and private businesses in Guangdong were responsible for more than 80 percent of the province's new employment. The average annual salary of employees in private businesses increased from 53,300 yuan to 73,200 yuan, with an average annual growth rate of 8.7 percent higher than the province's economic growth level during the same period. As well, annual taxes paid by private businesses in Guangdong exceeded 1 trillion yuan, with a cumulative increase of 25.9 percent.

"This has provided strong support for stabilizing the economy and ensuring people's livelihoods in the province," the official said.

As a province with a strong private economy base and a growing number of SMEs, Guangdong has rolled out a series of preferential policies to support these businesses in several sectors, including financing, land use and intellectual property protection.

"SMEs have become an important source of innovation in Guangdong, a key player in stable employment, a crucial link in enhancing the stability and competitiveness of industry and supply chains, and an important component of the real economy's development," the official said.

"They constitute an essential foundation for the sound development of Guangdong's economy, and provide strong support for the province to remain at the forefront of promoting Chinese modernization," he added.

With the 18th China International Small and Medium Enterprises Fair and the second SME International Cooperation Summit scheduled to be held in Guangdong from June 26 to 30, the province is organizing activities focused on promoting high-quality development of SMEs and enhancing high-level opening-up.

"Guangdong will take the opportunity of hosting this event to further create a first-class business environment that is market-oriented, internationalized, governed by law, and fully supportive of SMEs to expand domestic and foreign markets," the official said.

"It will serve to deepen exchanges and cooperation and achieve common development and mutual benefits at a broader and higher level."