Work Report on Yunnan SME SWOT

1. Work Report on Yunnan SME SWOT Mr Hou Kunming Mr Francis Zhang Ms Xu Lei (Presenter) Mr Yin Yonglin Ms Zhao Yuang

2. Outline Overview of the situation of trade and economic cooperation in Yunnnan Province Definition of SMEs SWOT Analysis Policy Enviroment

3. Foreign Trade between Yunnan & GMS Countries

4. Foreign Trade between Yunnan & GMS Countries

5. Export Commodities

6. Import Commodities

7. 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%.

8. Mutual Investment 186 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

9. Definition of SMEs

10. SWOT

11. Strength Resouceful • Unique geograhicial advangtage • Techonolog, commerce, products, market resouces • Industries from east China

12. Strength ASEAN - The Largest Exports and Investment Area • The average growth rate of trade between Yunnan and ASEAN since 1995– 18% • 173 Yunnan Provincial investment enterprises – 2008 1.276 billion U.S. dollars; 90% of the total number of overseas enterprises in Yunnan province 90% of total amount of oversea investment

13. Strength The 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%

14. Strength SMEs - Major Force in Foreign Investment • SMEs rank the first • Nov 2007: 340 million U.S. dollars 80% • July 2008: 41 enterprises 80%

15. Strength Border 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

16. Weakness Inadequate 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

17. Weakness Lack 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

18. Weakness • Restrict oversea investment of SMEs • Lack of Own Power • Affect the competitiveness and ability to resisit risks • Small scale, weak enterprisses, few leading firm Shortage of Entrepreneurial Talent

19. Opportunity • per capita GDP exceeded 1,000 U.S. dollars • The capacity and conditions to foreign investment • Risingcross-country and cross-cultural exchanges ablity Rapid Economic Development of Yunnan Province

20. Opportunity Increasing 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

21. Opportunity Improved 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

22. Opportunity Abundant 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

23. Opportunity Regional 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

24. Opportunity Accelerataing International Channels • Multi-level, three-dimensional transportation network • Yunnan - ASEAN International Channels • Highway • Railway • Airport • Port

25. Threats Underdeveloped 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.

26. Threats Increased Difficulties in Corporate Finance • Financial crisis • Careful domestic banks to prevent risks • Importers extend payment collection risks

27. Threats Effect of AFTA to traditional industry in Yunnan Low grading supply chain Fast spread of commuicable diseases

28. 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

29. Thanks