SMES IN SUNAN REGION: GOOD EXPERIENCE TO BE LEARNT苏南地区的中小型企业：发展的路程与经验

曾育发 ( Chen Yoke Fatt)杨志强 (Yeo Zhiqiang)陈家伟 (Robin Tan Kah Wee)黄培炜 (Edwin, Ng Puay Wei)陈昌财 (Alex, Chen Changcai)

CONTENT

Theme Rationale Report Structure Preliminary Findings

Introduction and Background of Jiangsu Province, Sunan The Sunan Model Traits of TVEs in Sunan Definition of SME Case Studies of Companies Key Lessons to be learnt What local SMEs can learn from SMEs in Sunan

Questionaire

THEME RATIONALE - “SMES IN SUNAN REGION: GOOD EXPERIENCE TO BE LEARNT”

Investigate how enterprises in Sunan region have contributed to the affluence of the southern Jiangsu province

Opportunity to visit places in Sunan region to further improve on research

Sunan model Scope is amply defined

REPORT STRUCTURE

1. Introduction and Background of Jiangsu Province, Sunan

2. The Sunan Model3. Traits of TVEs in Sunan4. Definition of SME5. Case Studies of TVE and other companies6. Key Lessons to be learnt7. What local SMEs can learn from SMEs in Sunan8. Conclusion

PRELIMINARY FINDINGSSub-Topic Completed?

Introduction and Background of Jiangsu Province, Sunan

Definition of SME

The Sunan Model

Traits of TVEs in Sunan

Case Studies of TVEs and other companies

Key Lessons to be learnt

What local SMEs can learn from SMEs in Sunan

Conclusion

RESEARCH CONSTRAINTS

Case study focus on Wuxi and Suzhou No clear cut definition of SME in China

INTRODUCTION AND BACKGROUND OF JIANGSU PROVINCE, SUNAN

GEOGRAPHICAL DESCRIPTION

Generally flat and low-lying Plains covering 68 percent Well-developed irrigation system [ 水乡 ]

WEATHER

Humid and subtropical/humid climate zones

-2 to 4°C in January and 26 to 30°C in July

Frequent rain between spring and summer

Average rainfall 800 to 1200 mm, mostly in summer

MAIN CITIES IN SUNAN

1 Nanjing 南京市

2 Changzhou 常州市7 Suzhou 苏州市9 Wuxi 无锡市13 Zhenjiang 镇江市

Map of Jiangsu Province

NANJING

Government

 - CPC NanjingZhu ShanluCommittee Secretary

 - Mayor Ji Jianye

 - Total 6,598 km2 (2,547.5 sq mi)

- Elevation 15 m (50 ft)

Population (2008)

 - Total 7,588,900

 - Density 1,123.5/km2 (2,909.9/sq mi)

- GDP (2008) ¥377.5 billion

 - per capita ¥50,327

Key Industries:- Automobile industries- Electronic- Petro Chemical- Textile

CHANGZHOUGovernment

 - Mayor Wang Weicheng ( 王伟成 )

Area

 - Prefecture-level city 4,375 km2 (1,689.2 sq mi)

 - Urban 1,864 km2 (719.7 sq mi)

Population (2004)

 - Prefecture-level city 3,489,000

 - Density 797.5/km2 (2,065.5/sq mi)

 - Urban 2,085,500

 - Urban Density1,118.8/km2 (2,897.8/sq mi)

- GDP ¥220.2 billion (2008)

- GDP per capita ¥50,283 (2008)

- Major Nationalities HanKey Industries:- Engineering- Food Processing- Steel processing- Textile industry (1920)

SUZHOU

Government

 - Type Prefecture-level city - CPC Suzhou Secretary Jiang Hongkun ( 蒋宏坤 )

 - Mayor Yan Li ( 阎立 )

Area 

 - Prefecture-level city8,488.42 km2 (3,277.4 sq mi)

 - Urban1,649.72 km2 (637 sq mi)

Population (2008)

 - Prefecture-level city 6,297,500

 - Density741.9/km2 (1,921.5/sq mi)

 - Urban 2,382,100

 - Urban Density1,443.9/km2 (3,739.8/sq mi)

GDP (2008)

 - Total ¥670.1 billion

 - Per capita ¥106,412 (US$15,322)

Key Industries:- Chemicals- Computer- Light machine- Metal- Silk

WUXI

Government

 - CPC Secretary Yang Weize ( 杨卫泽 )

 - MayorMao Xiaoping ( 毛小平 )

Area

 - Prefecture-level city

4,787.61 km2 (1,848.5 sq mi)

 - Urban1,659 km2 (640.5 sq mi)

Population

 - Prefecture-level city 4,471,900

 - Density934.1/km2 (2,419.2/sq mi)

 - Urban 2,235,700Key Industries:- Electronics- Machinery- Petrol Chemical- Textile

ZHENJIANG

Government

 - Mayor Xu Jinrong ( 许津荣 )

Area

 - Prefecture-level city3,847 km2 (1,485.3 sq mi)

 - Urban1,082 km2 (417.8 sq mi)

Population (2008)

 - Prefecture-level city 2,672,100

 - Urban 625,400

GDP ¥140.8 billion (2008)

GDP per capita ¥46,473 (2008)

Major Nationalities

Han - 99.43%HuiUyghurKazakTatar

Key Industries- Domestic commerce. - Food Processing - Paper making

GDP 1593.10 RMB Bil

(2007) 6.19% of China’s GDP

(2007) CAGR of 14.72%

94959697989900010203040506070.00

500.00

1000.00

1500.00

2000.00

WuxiSuzhouChangzhouZhenjiangNanjing

Year

RM

B b

il

SUNAN MODEL

SUNAN MODEL

Collective ownership of Township and Village Enterprise (TVEs)

Dominant role of local government and party cadres in rural industrialization

Priority assets of local economy and main revenue generator

SUNAN MODEL

Township and Village Enterprise (TVEs) formerly named as “Commune and Brigade

Enterprise” surged during economic reforms in late

1970s collectively owned by local residents in

the rural areas rights of ownership exercised by the town

and village governments (TVG)

COMMON FEATURES/TRAITS OF TVES

Government Support — Favorable policies that support TVEs

Management — Separation of ownership and management

Resource — high population density Industry — developed industry tradition Development strategy — pioneers for

adopting the market economy

SUCCESS OF SUNAN MODEL

Began to outdo state-owned players in early 1990s.

In 1994, rural enterprises accounted for 44% of China’s industrial gross output, while the contribution of state-owned firms dropped to a record low of 34% (calculated from ZTN 1995).

Leading driver of growth

DOWNFALL OF SU NAN MODEL

Economic growth tapered off Rural firm output and profit dwindled Declining growth rate Pressure to privatization of TVEs Sunan Model ended in 2003

TOTAL INDUSTRIAL OUTPUT (BILLIONS) OF TVES (SUZHOU)

Annual Growth Rate : 49%

Annual Growth Rate :

-31%

•70% of TVEs in Sunan practiced some kind of properties rights reformsMid 1990s

•TVEs in Sunan underwent 2 waves of “institutional change”Late 1990s

•Focus on privatizing money-losing small and medium TVEs•Promote individual businesses and private enterprises

First Wave1997-1998

•Focus on privatizing money-losing large TVEs•Pressed Directors of TVEs to buy the company or take a share if unable to buy it all out

Second WaveLate 1998 - 2000

•95% of TVEs in Sunan practiced some kind of properties rights reforms By 2000

DEFINITION OF SME

Private Limited (Non state-owned) No regional head office

2 non-Chinese firms1 Township-Village-Enterprise

CASE STUDIES

SEAGATE TECHNOLOGY INTERNATIONAL (WUXI) CO. LTD ( 希捷国际科技（无锡）有限公司 )

opened in July 1995, facility of 58,000 square meters and workforce

of 9,000 underwent a major expansion in 2002 earned the distinction of top foreign company

by export value in the Jiangsu Province enjoys strong support from the local

government

AMTEK (SUZHOU) PRECISION ENGINEERING LTD ( 安特（苏州）精密机械有限公司

formerly known as Amtek Engineering Pte Ltd company was founded in 1970 designs, manufactures, and assembles metal,

plastics, and rubber components serves various industries:

automotive, computer and computer peripherals, consumer electronics, electrical, mass storage, telecommunications

AN EXAMPLE OF A TVE - HUAXI VILLAGE

Richest township-village enterprise in China Also known as Jiangsu Huaxi Group Corp (江苏华西集团公司 )

Listed in 1999 at Shenzhen Stock Market Now employs 25000 persons, over 2000 of whom

are middle and senior engineering technicians. Most subsidiary companies of the Group have

imported advanced production facilities from abroad

Companies are mostly in steel, metal and textile industries

PROGRESSIVE CYCLE OF HUAXI

KEY LESSONS TO BE LEARNT

To be consolidated after the BSM trip

WHAT SINGAPORE SMES CAN LEARN FROM SUNAN

Innovation from the smallest unit Seize the opportunity Play to your strength Take advantage of local government’s

support which Singapore’s government have

QUESTIONAIRE

请问您觉得苏洲会在哪方面能超越上海？ 贵公司为什么会选择在中国发展 ? 请问贵公司在进军国际市场上有什么策略 ? 如今中国的市场已近越来越蓬勃了，贵公司要

怎么样打算在这市场上竟争？ 在您的看法，贵公司能够运用中小型企业所得

来的经验来面对将来大公司的挑战？