Small is beautiful in Sino-US economic relations

0 CommentsPrint E-mail Global Times, June 2, 2011
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[By Liu Rui / Global Times]

Small and medium-sized enterprises (SMEs) are the most energetic elements in the global economy, yet they are always neglected when people talk about bilateral economic relations, and even the impact on global economy because individual firms rarely compete on the global market.

But the financial crisis's damage to the national economies of large countries like China and the US was inflicted first on SMEs, which are also the starting point for national economic growth.

SMEs are not only the majority of the market, but a critical part of the economy, and should be supported under all conditions anyway.

When it comes to the Sino-US economic relationship, we should not solely be concerned with cooperation among big enterprises and ignore the small ones.

SMEs in the two countries share similar characteristics and face the same problems. Compared with the large enterprises, they have more in common, therefore can cooperate more easily to develop their advantages and supplement each other.

Of course, there are obvious differences between the two countries. The US has long been top of the international industrial pyramid.

Its SMEs are experienced in marketing and management, and are skilled innovators and investors, with a large talent pool.

Compared to them, Chinese enterprises are mostly stuck in the middle and bottom areas of the pyramid, though they are powerful manufacturers, with a strong will to learn from others, and their costs are low. But these complementary differences show the huge potential for cooperation between the two countries. It will benefit both sides to give reciprocal assistance, to explore the market, and to improve competitiveness, while understanding the many economic, social, and legal differences between the two nations.

Currently, many Chinese SMEs are seeking to work together with their US counterparts, often with successful results. For example, one Beijing-based enterprise established a joint venture company with an US enterprise and set up a Chinese product experience stadium in Las Vegas, exploring the market for LED applications, with remarkable results.

One company in Beijing's Zhongguangcun, China's "Silicon Valley," has long supplied matching products for an IT company in the actual Silicon Valley in California, and now cooperates on the manufacture of their US partner's product series.

At present, globalization is changing the world's industrial pattern, consumption markets and the economic landscape. SMEs in China and the US are facing huge opportunities. They should not be stragglers, but should search for new positions in the global market and play more important roles.

Meanwhile, the popularity of information technology and the Internet enable these companies to connect easily, cooperate in numerous ways, and lower costs. The obstacles standing in the way of international cooperation have been reduced, thanks to technology.

The US is accelerating its economic recovery and China's development is as fast as ever. Both countries have emphasized the role of SMEs in their economic plans and commenced a series of policies designed to help them. This shows that Sino-US SMEs have plenty of room to develop and cooperate.

Sino-US cooperation in SMEs is a significant component of the economic relationship between the two countries.

Promoting this joint work will not only bring economic benefit but also strongly support the economic relationship.

Despite their size, as long as they seize the right chances, SMEs will both prosper and make a significant contribution to their country's economic development.

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