Work Report on Yunnan SME SWOT

Mr Hou Kunming Mr Francis Zhang

Ms Xu Lei (Presenter) Mr Yin Yonglin

Ms Zhao Yuang

OutlineOverview of the situation of trade and

economic cooperation in Yunnnan Province

Definition of SMEs

SWOT Analysis

Policy Enviroment

Foreign Trade between Yunnan & GMS Countries

Foreign Trade between Yunnan & GMS Countries

Export CommoditiesMachinery &

Electronic Products

Textiles & Clothing

Iron & Steel Products

Phosphorus Chemical Products

TobaccoUnwrought

Lead Refining

Electric Power

Import Commodities

Wood Agricultural Products Copper Sand

Oil & Asphalt Non-alloy Tin Metal Ores

Rubber & Rubber Products

Project Contracting & Labor Cooperation

5.265 billion U.S. dollar

3.088 billion U.S. dollars

5.46 million U.S. dollars

2.43 million U.S. dollars

6490, increasing 29%.

Mutual Investment186 enterprises from Yunnan invested in GMS countries

900 million U.S. dollars

289 project from GMS countries invested in Yunnan

346 million U.S. dollars

124 million U.S. dollars

Definition of SMEsMiddle Small

Types Employer Yearly Market Sale (thousand US$)

Assets Employer Yearly Market Sale(thousand US$)

Assets

Industry 300-2000 4410-44100

5880-58800

Below 300

Below 4410

Below 5880

Building Industry

600-300 4410-44100

5880-58800

Retail 100-500 1470-22050

Below 100

Below 1470

Transportation 500-3000 4410-44100

Below 500

Below 4410

Accomodtion & restantrant

400-800 4410-44100

Below 400

Below 4410

SWOTStrength Resourecful Increasing policy support ASEAN - the largest exports and investment area Agriculture, mining, power,tourism industry SMEs become major force Border trade

Weakness Inadequate support of government policy, services Lack of international operational experience and personnel Shortage of entrepreneurial talent Small scale, weak Enterprises Few leading firm

Opportunity Rapid economic development of Yunnan Province Imroving modern enterprise system Abundant resources of overseas Chinese Regional cooperation International Channels

Threats Underdeveloped infrastructure Increased difficulties in corporate finance Effect of AFTA to tranditional Industry in Yunnan Low grading supply chain Fast spread of communicable diseases

StrengthResouceful

Unique geograhicial advangtage

Techonolog, commerce, products, market resouces

Industries from east China

StrengthASEAN - The Largest Exports and Investment Area

The average growth rate of trade between Yunnan and ASEAN since 1995 – 18%

173 Yunnan Provincial investment enterprises – 20081.276 billion U.S. dollars;

90% of the total number of overseas enterprises in Yunnan province 90% of total amount of oversea investment

StrengthThe Forefront Investment Industry

- Agriculture, Mining, Power Industry 68 agricultural companies 54 mining companies 14 metallurgical processing companies 11 power companies

Resource Investment: 1.017 billion U.S. dollars 70% Electronic and mining resource investment: 295 million U.S.dollars

71%

StrengthSMEs - Major Force in Foreign Investment

SMEs rank the first

Nov 2007: 340 million U.S. dollars

80% July 2008: 41 enterprises

80%

StrengthBorder Trade – Important Way for SMEs

Border trade - important means; Yunnan - green channel

A series of development policy since 2008 Special transfer payments Import tax exemption for border trade Special economic zone Reducing burden of border trade enterprises Export tax rebate by RMB settle accounts

SMEs – Increasing status Flexible mechanisms Lighten burden of production Low cost

WeaknessInadequate Support of Government Policy and Services

Lack of preferential policies

The treshold of policy are too high

Lack of bank loans financing guarantees, the right of foreign trade, customs facilitation, foreign exchange management, preferential support etc

WeaknessLack of International Operation & pernnel

Lack of a clear strategy of oversea investment systematic research and early risk assessment few understanding of outside environment

Lack of understanding of the risk of market the conditions of other countries

Companies will lose the investment because they are difficult to adapt to cross-cultural exchange

WeaknessShortage of Entrepreneurial Talent

Restrict oversea investment of SMEs

Lack of Own Power

Affect the competitiveness and ability to resisit risksSmall scale, weak enterprisses, few leading firm

OpportunityRapid Economic Development of Yunnan Province

per capita GDP exceeded 1,000 U.S. dollars

The capacity and conditions to foreign investment

Risingcross-country and cross-cultural exchanges ablity

OpportunityIncreasing Policy Support to Encourage

SMEs to Foreign Investment

Proactive fiscal policy

Loose monetary policy

A series of policy to expand domestic demand

Funding of international market development

Export credit insurance

OpportunityImproved Modern Enterprise System and the Ability of

Independent Innovation

Acceleration of the process of new industrialization

Improving quality of entrepreneurs

Traditional family - modern business management model

Improved organization system

OpportunityAbundant Resources of Overseas Chinese

One of the five overseas Chinese

A positive familiar with local political, economic, legal, financial, tax aspects

Familiar with the situation in China

Reduce blindness and risks

OpportunityRegional Cooperation

GMS economic cooperation mechanism

China (Yunnan) - Northern Thailand cooperation Mechanism

China (Yunnan) - Northern Laos cooperation Mechanism

China – Northen Vietnam Economic Cooperation Mechanism

Yunnan - Mynmar Economic and Trade Cooperation Forum

OpportunityAccelerataing International Channels

Multi-level, three-dimensional transportation network

Yunnan - ASEAN International Channels

Highway

Railway

Airport

Port

ThreatsUnderdeveloped Infrastructure

Underdeveloped infrastructure problems of transportation,

logistics, information and underdeveloped

Problems of inconvenience of customs clearance, imcompleted port construction facility and cross-border transportation issues

Kunming – BKK Highway.

ThreatsIncreased Difficulties in Corporate Finance

Financial crisis

Careful domestic banks to prevent risks

Importers extend payment collection risks

Threats

Effect of AFTA to traditional industry in Yunnan

Low grading supply chain

Fast spread of commuicable diseases

Policy Enviroment Implement the "going out" strategy to encourage

enterprises to invest abroad and develop labour cooperation

Promote foreign trade, optimize export structure and expand exports of agricultural products and further expand imports

Expand the use of foreign capital

Strengthen the construction of port facilities

Thanks