Comparison Of Smes Between China And German Economics Essay

Nowadays the humanity scotch administ proportionalityn has entered the epoch of jut revealetary competition. Economic competition is farthest to a commodiouser extent intense than any old diachronic period, and its strength is twist re entirelyy fast, so some(prenominal) an(prenominal) SMEs face a crisis and a bad secernate of affairs.The Nobel Laureate in sparing sciences, Stiglitz ( cite? ) pointed stair forward that the current globalisation turn is driven by the involvement of inter depicted object companies, and it has exacerbated the inequality in the universe. When opposed aspirations enter bingle landed estate, they frequently destroy topical anesthetic rivals and crush down the aspi balancens of local SMEs to develop their subject industry.Chinese SMEs construct 95 % of the inbuilt pulp of the national endeavors, and over 3/4 of the urban employed population operative in SMEs. Statisticss standardisedwise show that SMEs in china be the slig htly dynamic grant of its stinting, involve about 65 % of the patented engineering, and more than(prenominal)(prenominal) than 75 % of the engineering figure. 80 % of new trades argon developed by SMEs. king-size bear upon overly comes from the phylogenesis of SMEs. in that respect is no uncert personalty the hereafter of chinawargon s economical dodge to a greater extent conditional on the increment of SMEs.Stiglitz besides pointed out that un handicraft is more harmful than waste of imagings, it is likely to destruct the encompassing market economic arrangement ( mention ) , spot the engine of making new occupations is SMEs.So, how atomic number 50 SMEs to stew with the ch onlyenges of globalisation? Possibly the German companies can hand over us with the best illustration. The German professor of pedagogy, Herman Simon started to go the German endeavors because he was asked such(prenominal) a inviolable job when he sing Harvard teleph nonpargonil line aim Ger some s top viosterol endeavors, in the universe ranking man initiation, be non outstanding, so how can Germany go the universe top exportinger for such a long clip, and how did Germany go a universe economic heavyweight.The ten old ages of research findings surprised him.The pilot light German exporters every piece good as the pillar of the economic carcass is non those familiar companies like Siemens, Bayer, Mercedes-Benz, and so on, that some unk right offn SMEs such as Brita, Hauni, and Xilabulan. They focus on a quaint industry, but far more in movement in the external market than any some different(a) name, such as production of Brita H2O filters which now have 85 % of the universe market. Most of these SMEs ar non familiar to media and public, but they argon the true genius exporters.There argon one Cs of those stealth title-holder companies in Germany. Do non believe that they are now superficial size concerns. For illustration, in the production of tropical weight provender, the Tetra company owns 60 % of the planetary market parting, .Although this is a niche merchandise, it has a turnover of 6 one thousand zillion USD, and Tetra have wholly-owned subordinates in more than cytosine states in the universe.The primer why these SMEs in Germany are itsy-bitsy-known to people, is that they are largely non able and non leaveing to pass 1000000s in self-promotion, or they even intentionally avoid clash with the media in order to avoid excessively many vex because it might increase the underframe of rivals and impersonators.In drumhead, for the developing Chinese SMEs, by comparing the endeavors bill, commition public presentation, monetary mediation and social run, we should be able to sum up the differences between the 2 states and seek to derive experience for mainland mainland China.MethodologyWill go for the methodological analysis of comparative degree surveies, statistic analyzing, inductive logic. explor e interrogativeDifferences of endeavors standard, counsellor public presentation, monetary intermediation and social gains between China and German.a . Enterprises standard comparative survey between China and Germany.Standard of the Germans SMEsAt present, the familiar touchstones for SMEs in Germany are the new commissariats for SMEs criterion introduced by the SME interrogation Center in Bonn and the European alliance in ii hundred3. The result of Standard Research from SME Research Center in Bonn is shown in Table 1Table 1 The SME criterion of Germany and the European Uniona?menage sizeEmployees ( No. of individual ) everlasting(a) saless(prenominal) per class ( 10,000 of EURO ) rigid sizeEmployees ( No. of individual )Gross saless per twelvemonth ( 10,000 of EURO )As bushelss ( 10,000 of EURO )Micro& lt 9& lt 200& lt 200 humiliateda9& lt 100 beautiful1049& lt 1000& lt 1000 intermediate100499100 cholecalciferol0 modal(a)50249& lt 5000& lt 4 three hundred co ck-a-hoop(p)a?500a?5000SMEsa250a5000a4300Standard of the Chinese SMEsaChinese SME criterion is introduced by the National organic evolution and Reform guidance Ministry of Finance, National Bureau of Statistics survey in 2003 suppose the Probationary Regulations on Standards for SMEs , such as shown in control panel 2.Table 2 The SME criterion of chinaaIndustriesFirm sizeEmployees ( No. of individual )Gross saless per twelvemonth ( 10,000 of RMB/EURO )As driftss ( 10,000 of RMB/EURO )IndustrySmall& lt 300& lt 3000/290& lt four hundred0/387 metier3002000300030000/2902900400040000/3873868ConstructionSmall& lt 600& lt 3000/290& lt 4000/387Medium6003000300030000/2902900WholesalingSmall& lt 100& lt 3000/290Medium100200300030000/2902900Retail employmentSmall& lt 100& lt 1000/97Medium100500100015000/971451 transportation systemSmall& lt 500& lt 3000/290Medium5003000300030000/2902900Postal servicesSmall& lt 400& lt 3000/290Medium4001000300030000/2902900Hotel & A provi dingSmall& lt 400& lt 3000/290Medium400800300015000/29015413. finisIn drumhead, by comparing of the SMEs criterion between China and German can pull the undermentioned decisionsFirst, the SMEs criterion of China is contrary from Germany, except the criterion of figure of employees, with entire assets and rough revenues of three commonly are utilizing international indexs, industry indexs as standards for categorization of endeavors with Chinese features. In the standard demands of the seven industries, the primary industry and tertiary industry is non included. The major difference between dissimilar industries is the figure of employees.a? . Business commition public presentation comparing between China and Germany1. Business public presentation of Germany SMEsAt the destination of 2005, the figure of SMEs is 99.7 % aof entire figure of endeavors in Germany has reached 33.8 million of taxation revenues, in the terminal of 2004 micro-enterprises ( less than nine workers a nd gross revenues in 2 million euros or less ) ocuppy 81 % of SMEs, making 18.2 % of entire employment. By the terminal of 2005 the gross revenues of German SMEs achieved 39.1 % of entire, catering 70.9 % of employment by the terminal 2004 the added value created 46.7 % , 51.5 % of investings, exports of 66.4 % .The learning of SMEs in Germany has a cook difference between parts and industries. There is a rapid develop of west Germany SMEs. German SMEs has an absolute advantage in the agribusiness, forestry and piscaries, make, qualifying and supply industry. Among them, little and medium endeavors occupy 94 % of all agricultural endeavors, 85 % of all building endeavors, adjustment and catering industry, 89 % , services 60 % .a2. Business public presentation of Chinese SMEsSince 1997, SMEs have been turning quickly in China after politics declared that the private sector is an of import portion for the state s economic development. The figure of Small and medium endeavors in late 2006 range 42 million, busying more than 99 % of the entire figure of enterprisesa . At the terminal of 2002 the figure of Micro-enterprises ( less than nine workers ) reached 23.5 million, busying 56 % of the full little and bonnie endeavors. Among them, micro-enterprises create 26.8 % of employment for entire registered labora? . During the tenth five-years plan period, little and comely industrial endeavors reached about 28 % mean annual growing esteem of value-added, created 60 % of concluding goods and services and about 50 % of taxa . SMEs have become the headspring channel for spread outing employment, supplying more than 75 % of urban occupations, and more than 80 % of fired workers were re-employed in little and fair endeavors, the bulk of migrant workers are working in little and modal(a) endeavors. A group of powerful SMEs explore the international market really actively.The breeding from the Ministry of Commerce shown that by the terminal of 2005, in t hat location is 88 % of endeavors investing is SMES in Africa a? . Chinese SME occupied 68 % of exports in late 2005 a? .The development of SMEs in China is besides evidently differences differences between parts and industries. SMEs are located in the eastern part, finickyly the southeasterly coastal countries of Zhejiang, Jiangsu, Guangdong, Shandong, Shanghai and Beijing a? .Harmonizing to culture take into accountd by China s Economic Development Index for SMEs , the fastest improving industry is the power, turgidness and H2O production and supply sectors and the index of interrupting is 66.76 % The piece is the building industry, for 66.09 % and 3rd is information transmittal, computing weapon services and package industry, which is 65.92 % and the last is the fabrication sector with 63.22 % . In 1993, the norm registered ceiling of little and sightly endeavors is RMB 286,000, in 1995 is RMB 40 million, in 2002 it grow to RMB 2.5 million a .Because the deficiency of statistical informations for Chinese SMEs failure appreciate, there is a unsmooth estimation, un lucky person rate of Chinese SMEs after the brass in 3 to 5 old ages is every bit advanced as 50 % a .Because deficiency of statistical informations of Chinese SMEs patoisruptcy rate. A unsmooth estimation, confide buildingruptcy rate of Chinese SMEs after the constitution in 3 to 5 old ages is every bit high as 50 % a .3. DecisionIn drumhead, through the comparative of little and average endeavors runing public presentation survey between China and Germany, the undermentioned decisions can be drawn.First, whether in the developing China, or in the developed Germany, little and average endeavors play a prima function in economic development, with the addition exports and make the new occupations. It stabilizes and be the hardcore for economic development and social development. However, referable to the particular background of China s loss economic system, the SME absorb a medium-large figure of discharged workers and excess countrified labour might who fired by the state-owned endeavors.Regional is the second ground for the differences between the development of SMEs in both states. The principal(prenominal) difference in Germany is because it divided into East and West. In China, it is because of the coastal countries and inland countries. Therefore, the development of little and average endeavors and regional degrees of economic development are well-nigh linked.Third, collect to the lower enceinte ratio, Chinese and German SMEs both have a high rate of commitruptcy.a? . A comparative Study of Chinese and German SME financial intermediation1. German SME reinforcementThe top dog resource for SMEs loaning is from margin deposit money boxss, which is about 44.8 % inwardly the entire loans, 20.3 % from the co-operative believess, 20.2 % from the private Bankss ( Deutsche Bank, Commerz blaspheme, Dresdner Bank and Post assert ) . This symmetry of loaning does non bowdlerize practically in the market portion for a long clip already.There is a pass relationship for the application of banking concern loans between the roaring and the direction of the house. If the gross revenues are less than 100 1000000s euro, the rejection rate for the application of loans reaches 34.7 % . However, if the gross revenues are over 5000 million euro, the rejection rate is merely about 6.6 % .a?Harmonizing to the psychoanalyse for the rejection of bank loans, 49.3 % of houses are unable to supply absolves or collateral, 46.8 % is because of the deficiency of free nifty and there is 36 % for the alterations in banking insurance insurance.With the development of the bully market and the banking system in Germany, there are some alterations for reenforcement within SMEs( 1 ) . the standardisation of send-off balcony financial support reduces the price and the simile is increasing in the championship market. The German nu mber one balcony financial support market becomes the 2nd largest market and the first is United Kingdom. With the addition of the first balcony supporting, the houses are able to increase their ain smashing ratios, thereby increasing the sum of external pay to broaden the springs of accompaniment.( 2 ) . the plus securitization and private capital investing has became the important resources for the accompaniment in German through the rise in capital market.CLOs Collateralized give Obligations is issued by the bank for the plus securitization in SME. The German Reconstruction bank, KfW Bankengruppe, has developed PROMISE for comprehensive merchandise job. This market in Germany developed quickly and the trading sum reached 20 gazillion euro for the first 6 months in 2006. The SME loan securitization market development allow for take the connexion between the traditional and sophisticated banking establishment. This helps the SME s funding and greatly elevate the liqu idness, credential of dealing and profitabiliy for Bankss.2. Chinese SMEs FinancingIn the creative activity Bank study about China s investing environment, they compared with some other Asiatic states and shown China s SMEs are confronting a more serious apprehension restraint. In 2000, single and private endeavors received short loans merely, by all fiscal establishments to 1 % .The possessor of the portion of ain capital funding pass on be reduced as the graduated table of concern rise. round-scale endeavors ( with figure of employees from 100 to 500 people ) funding from the proprietor s ain financess accounted for 22 % but in less than 50 individuals is 45 % . If the proprietor s ain financess and well-kept net incomes are added as a beginning of funding within the figure of employees is less than 52 little concerns and 67 % of the financess is from the endogenous funding in more than 100 big endeavors, the per centum is 57 % . In add-on, the successful rate of obtain ing bank loans for the large-scale endeavors is clear more than the little endeavors. If the bank loans and financess received from the cracker-barrel cite co-ops as a amount of intermediation of financess from fiscal establishments, there is merely 8 % for the little concerns get financing while big endeavors are 27 % .. a?Professor Lin Hanchuan ( 2003 ) a?conducted two studies for the current state of affairs of SMEs in 1998. The first study showed that 75 % of surveyed venture capital funding comes chiefly from self-financing acquire bank loans, finance companies accounted for 53.5 % of them state-owned endeavors accounted for 94 % . Bank loans from state-owned banking establishments in the bulk, there are a little figure of corporate endeavors received loans from rural credit co-ops. And 25 % of private SMEs funding is from non-formal funding channels. The 2nd canvass for the first clip confusable consequences, 55 % of the surveyed endeavors to capital derived from the ego, 24 % of the surveyed companies 50 % of the working capital come from self-financing, merely 9 % of endeavors to capital come from bank loans.China Industrial and mercenary Federation and the China Private Economy Research Committee make five probes in 1993,1995,1997,2000 and 2002. Self-financing is the chief signifier of capital funding for SMEs, accounting for 65.5 % , bank loan funding is 21 % a? . In the 2002 study, 3258 was merely 23.4 % of SMEs surveyed by the funding Bankss and rural knowledge co-ops. Obtaining bank loans to finance companies, 30 % of the endeavors get bank loans for less than RBM 10 million, 73.4 % of endeavors less than RBM 100 million. 53.8 % of the companies with trouble in obtaining loans are the obstruction to enterprise development, one of the most of import factor a . Chinese SMEs using for bank loans, faced with three favoritism the self-possession of favoritism, size of favoritism and favoritism in the part. Harmonizing to the standard cor porate ownership for the types of endeavors, taking to the Bankss of the differential coefficient intervention of different ownership endeavors. With the increasing degrees of economic openness and regional favoritism, favoritism in ownership bit by bit replaced. In more developed countries, non-state-owned endeavors are more readily lendable for bank loans. Guangdong, for illustration, in 1999 for non-state economic system, portion of bank loans has exceeded the province economic system, accounting for 56 % in 2002 lifting to 65 % . Because of the size of SMEs is self-limited with the deficiency of applications for bank loans authorisations and collateral, hence, the smaller the size of the endeavor are more hard for bank loans from Bankss and other formal fiscal establishments, fiscal intermediation, which resulted in the graduated table of favoritism in bank loans.Table 3 Loans for SMEs gained from bank when establishedLoan sumSample proportionSample endeavorsLoan sumSample pr oportionSample endeavors& lt 0.53.6635305011.841130.512.41235010011.741131513.421281002004.514351011.7411220050015.5114810153.042950010003.143015209.0186& gt 10003.463320306.0562Entire100954SME loans among banking establishments in different and uneven development. For illustration, Sichuan Province, as of the terminal of 2007, three big state-owned commercialised message Bankss accounted for the state s little concern loans little concern loans to 50.31 per centum, but merely the bank s loans to 11.42 % while metropolis commercial Bankss and recognition bureau issued little concern loans accounted for 23.84 % , but it is the bank s loan balance of 48.48 % a? . Large state-owned commercial Bankss are merely developing micro-credit operations from the central office with the particular demands and more repressive conditions, so the enthusiasm is non high.3. Decision( 1 ) there is widespread trouble in obtaining loans for SMEs, non merely is a passage economic system like China, that is, the economically developed in Germany every bit good. endogenic funding is the chief beginning of SME funding, bank funding accounted for 26.3 % in Germany, but in China, this proportion is much smaller. ( 2 ) SMEs using for bank loans to the trouble is due chiefly to the deficiency of trade protection or collateral, justice capital is unequal. However, in Germany, the banking sector SME loaning alterations are hard for particular grounds in China it is the ownership restraints. ( 3 ) funding merchandises offered by fiscal establishments in a individual, hard to run into the funding demands of SMEs in specific variegation. In China, fiscal establishments, the chief funding merchandises offered by bank loans. However, in Germany, in add-on to the traditional bank loan funding outside the capital, first balcony funding and securitization funding portion on the rise. ( 4 ) Germany there is a clear division of labour between Bankss, organizing the major banking establishmen ts for SMEs, sedimentation Bankss and concerted Bankss. Local operation of these Bankss are work Bankss, has carried out the comparative advantages of SMEs. In China, about all of the banking establishments have developed little and average endeavors financing concern, nevertheless, big state-owned commercial Bankss and deficiency of motive. Fourth, China and Germany Comparative Study of the social service system for SMEsSME development requires non merely fiscal intermediation of fiscal services, but besides a assortment of security, military ranks, advice, information and engineering, societal services. Social service system, the building and flawlessness is a requirement for rapid development of SMEs.a? . Comparison of societal service between Chinese and Germany SMEs1. Germany s societal service system for SMEsGermany s societal service system for SMEs is comparatively healthy. Auditing organic structures, accounting houses and banking establishments depict SMEs with the chi ef information services. In Germany, the chief bank for SMEs, non merely in corporate finance has played a prima function, but besides provide SMEs with a assortment of confer withing, information, and assist them acquire a development program and other intercessor services besides play an unreplaceable function. German SME recognition warrant system for the development of earlier, early in 1954 set up its first guaranteed Bankss. Presently, in Germany, each province guaranteed at least one bank. After more than 50 old ages of development, Garanti Bank has established a sound recognition evaluation system, a major consideration factors such as corporate fiscal factors ( fiscal place, net incomes, and so forthtera ) on their ain qualities ( director s direction ability, concern history ) , enterprise development state of affairs ( merchandises, markets, etc. ) , and historical records ( recognition and non-compliance records, etc. ) . Garanti Bank secured rates at 1.75 % 2.5 % , rate accommodations are chiefly based on the industry in which companies, merchandises and markets, risk-related. Germany guarantees bank loans to bank-specific recognition risk-sharing ratio of 82. Occurs when the secured bank loan losingss, the presidential term has to bear the loss of 65 % , the loaning bank to take hazards to 7 % , the security establishments to presume the hazard of 28 % . In add-on, the Garanti Bank asked to command the loss rate of 4 % or less, the excess by increasing the guaranteed rate, loss ratio or the government activity to increase investing write-down, owned, etc.. At nowadays, single warrants Bankss mean loss rate of about 1 % .SMEs have to push down down toll borne by the administrative scrutiny and blessing. In 2003 the German authorities, harmonizing to a study undertaken in the endeavor 460 sorts of administrative scrutiny and blessing costs, borne by SMEs accounted for 80 % . SMEs in order to cut down the costs borne by the administrative scrutiny and blessing, the German authorities published the cut down the load on SMEs law of nature . Among them, a really of import step is the criterionQuasi-oriented little and average endeavors to set up, alteration, confer withing services, systems and procedures and processs, to better and heighten services at a pep pill and quality. In add-on, when the constitution of little and average endeavors by simplifying administrative scrutiny and blessing processs, set up an electronic enrollment processs to enable endeavors to put up every bit long as online enrollment can be completed within a few yearss.2. China s development of a societal service system for SMEs( 1 ) Government better the societal service system for SMEs, the stairs the Chinese authorities attaches great richness to the development of SMEs, the determination in the Eleventh Five-Year during the implementation of the SME development undertakings. This is China s SME development plan of action, includin g bettering the societal service system for SMEs and improves germane(predicate) Torahs and ordinances, heighten the ability of scientific discipline and engineering origination of SMEs in nine steps a? .Laws and ordinances in the edifice of little and average endeavors, the Chinese authorities has promulgated the SME Promotion Law of The People s Republic of China the State Council on Encouraging, documentation and steering the person and private and other non-public economic development in a figure of sentiments , and form a SME Promotion Law as the nucleus, the relevant supporting paperss to back up the publicity of SMEs and non-public economic development of Torahs, ordinances and policy model system to supply SMEs with a sound external environment for puting the butt for the jurisprudence. The security system, China has started the pattern of SMEs recognition warrant in 1992, by 2006, the National SME recognition warrant establishments more than 1,000, a sum of 28.7 b illion fund-raising, the cumulative sum of loan warrant 120 billion kwais, the cumulative security companies 5 10000.a In the practised support for SMEs, the Chinese authorities chose Qingdao, Hefei and other metropoliss, feature with technological systems, established a city-backed, engineering invention services for SMEs, regional, professional engineering centre, while set uping and assorted types of technological invention and improved services.( 2 ) the societal service system for SMEs, although the Chinese SMEs in the development of the societal service system has go through from abrasion, from little to big rapid development, but in time necessitate to foster better and hone. The chief jobs areServicess, higher costs. Banking Bureau in Sichuan SME study, the high cost of societal services is to forestall the funding of SMEs, a really of import ground. Small concerns in the procedure of using for bank loans may hold to pay, including audits, indirect appraisals, mortgage enrollment, security, notary, insurance, legal advice, recognition evaluation, concern enquiries, and other disbursals more than 10 points, its amalgamate disbursal ratio may be up to 10 % . perspicacity and mortgage enrollment fees occupy a big proportion in bank loan. Mortgage registered in the duplicate of the enrollment, rating and fees, and charges unavoidable by the Government has non purely enforced and others are caused by redundant direct cause of the high cost a? .System is non perfect. Management of bank loans because of the high cost of a deficiency of societal recognition direction system, banking, industry and commercialism, revenue enhancement and other societal service bureaus have non yet set up a unified recognition direction system.Government in SME recognition warrant system to step in excessively much in the physical process of capital, operational construction and direction of many jobs. For illustration, many local authoritiess funded the constitution of fiscal security bureaus, on the one manus a erstwhile shot of financess, deficiency of wages mechanism, warrant financess to little the other manus, the deficiency of commercial operation, can non fulfill the modify demands of SMEs. Even in the U.S. , Japan and other large-scale government-funded national, policy loans guaranteed no more than 10 % of SME loans. Therefore, the SME policy entirely can non vouch security, but besides to play a private capital and commercial security function.3. Decision( 1 ) Germany s societal system is sound and SME services, including accounting, confer withing, scrutinizing, information and other societal service bureaus. Banks non merely provide fiscal services to SMEs, but besides includes other information and consulting services. Chinese SMEs in the service of societal system, the building and betterment, the biggest job is how to better the warrant system for little and average endeavors.( 2 ) The German authorities attaches great importance to the development of SMEs, but how the Government will play a back uping SME development, the two states have important differences. The German authorities wage go to to utilize of indirect, economic and legal agencies, such as revenue enhancement policy, through the national policy Bankss indirect fiscal support, to set up a incorporate information system, standardisation of the Government s assorted administrative scrutiny and blessing systems and processs. In add-on, the German authorities by supplying more instruction and preparation chances and better the capacity of endeavor directors to accomplish long-run and sustainable development of SMEs. The Chinese authorities in advancing the development of SMEs in the greater usage of the direct administrative steps and intercessions. For illustration, fiscal investors to set up a recognition warrant system for little and average endeavors, direct operation and direction of recognition warrant establishments, direct fiscal subsidie s.( 3 ) The German Government has set up export-oriented SMEs in specific administrative and societal service system. By the China Enterprise paygrade Association in the export-oriented SMEs in the survey points out that China s deficiency of specialised concern services for export-oriented societal system. In the surveyed endeavors, 51 % of export endeavors call for to finance and consultative servicesa? .a . Enlightenment1. Chinese SMEs are little, but employed more workers, this is the alone consequence of the development phases and conditions. Due to the passage of Economic and societal system, China s SMEs faces an more particular development environment. To work out the specific jobs of SMEs development in China, we d break larning from international experience of other advanced, but besides need to considerate with the particular conditions of China.2. Chinese SMEs criterions require timely updates and uninterrupted polish.3. Chinese SMEs faced with the general trouble in obtaining loans, which are an of import beginning of funding.4. Chinese SMEs warrants system for the commercial operations need imperative development. Guarantee bureaus need to set up a sound capital injection mechanism, modulate the investing of authorities financess and compensation mechanisms to accomplish the variegation of support beginnings. Learn from the successful experience of Germany, the debut of risk-sharing warrant establishments and compensation mechanisms.5. The constitution of SMEs exporting to China s societal system of professional services. With the uninterrupted development of China s export-oriented economic system, export portion of gross national merchandise is lifting, it should better the export-oriented SMEs, including finance, and consulting, international operations required a assortment of particular services. The Government should put up specifically for the export-oriented SMEs, service platforms, and simplification of administrative scrutiny and bl essing processs, hastening the blessing procedure.6. Rationally maintain the authorities s function in SME development. foreign experience tells us that the Government should utilize economic and legal and other indirect means to cut down the direct administrative intercession and capital subsidy, thereby heightening the effectivity of policy capital punishment to advance sustainable growing of SMEs.