At the Dialogue Between Fortune 500 and APEC SMEs, a key forum of the Fourth Asia-Pacific Economic Cooperation Small and Medium Enterprises Technology Conference and Fair (APEC METC), which opened Thursday in Qingdao, east China's Shandong Province, businessmen provided their own solutions for "business bottlenecks" that block the development of SMEs. 

 

Many senior directors of Fortune 500 companies like Dell, IBM and Intel attended the two-day forum to speak on topics such as how to ensure SMEs get access to the international industrial chain, how to improve the core competencies of businesses, and how to properly handle personnel management.

 

As a leading company in chemical production, BASF wishes to assist SMEs in safety, health and environmental protection issues and allow them to achieve sustainable development, said Jonny C.W. Kwan, president of BASF Greater China at the forum.

 

"The majority of BASF's more than 3,000 customers in China are SMEs," Kwan explained in his speech. "In fact 99 percent of Chinese companies are SMEs. So it's our responsibility to work with them to ensure they become the winners of the future."

 

BASF formulated a long-term strategy focusing on SMEs two years ago and assisted them in realizing "Responsible Care" -- a concept that concerns relations between economy, ecology and society to achieve sustainable development, Kwan explained.

 

BASF provides training to their suppliers to achieve solid standards and comply with regulations and laws on safety, health and environmental protection. It also consults and provides solutions to its SME customers on supply chain management, market expansion, security and quality evaluation to improve their competitiveness.

 

To provide an all-round service BASF has set up a 24-hour hot line -- the only one by a chemical company in China -- and is preparing a program that will enhance cooperation on management and training between multinational corporations, well-known domestic companies and SMEs to provide support for the healthy growth of SMEs.

 

Cost saving was a hot topic during the forum. Dell focusing on direct sales and ensuring good supply chain management provided an effective solutions for their clients, especially the SMEs, said David Miller, president of Dell's operations in China.

 

By optimizing information flow, e-commerce and research and development on strategic products, Dell cut costs in logistics and processing, enhanced communication with customers and provided advanced product and service at low cost and at short notice. Domestic customers could get products within three days while overseas it was seven days.

 

China overtook Japan to become Dell's third largest market last year. The company stuck to localizing operations and hoped that Chinese SMEs could gain valuable experience from the Dell way of operating. "They can learn and understand our methods by doing business with us and from our Dell Learning Center," Miller explained.

 

On financing, Standard and Chartered (SC) Bank set up a special SME Department in 2002 and use a "5C" standard for providing loans to SMEs, said Christine Yip, president of Personal Banking in China.

 

With a comprehensive evaluation of the borrowers on background, capability, credit worthiness, cash flow and collateral, 5C avoided problems with information asymmetry, difficulties on risk evaluation and control and low credibility of SMEs in traditional banks when providing loans.

 

Relying on its 5C evaluation and experiences from international marketplaces, SC provides customer-oriented services to SMEs on raw and processed materials procurement, production, sales and gathering.

 

This month SC launched a pilot program on non-mortgage loans for SMEs in Shanghai and Shenzhen with limit of 500,000 yuan (US$62,500). "We know the hardship of Chinese SMEs' growth," said Christine Yip. "We'd like to use advantages like our international network and innovative products to help them," she said.

 

On the subject on innovation, Michael J Dixon, partner of Public Sector in Asia Pacific Business Consulting Services of IBM, introduced his experiences of the CEO's role in this particular area. 

 

According to a global CEO survey undertaken by IBM, most of them identified innovation as a prerequisite for growth. Three "musts" for innovation were removing obstacles inside a company, setting an effective business mode and updating the company culture, said Dixon.

 

With the increasing influence of Chinese enterprises on global markets, they should enhance their competitiveness by establishing their own brands and that needed an innovative culture, Dixon observed. 

 

Apart from building this spirit internally, 80 percent of the CEOs interviewed emphasized the importance of collaboration since 30 percent of the innovation sources actually lay outside the company. Collaboration on technology and service is very important for both the giant companies and SMEs, Dixon stated.

 

(China.org.cn by staff reporter Li Shen, May 20, 2006)