Phenomenal, unprecedented, soaring. Yes, I am indeed referring to China’s economic transformation. The country has achieved double-digit growth every year between 2003 and 2007. Of course, every now and then there are reports of China being impacted by the global downturn. But, while the world is contending with a slowdown and widespread uncertainty, the Chinese economy is still growing at a terrific pace and will continue to do so for some time to come.
China is home to some large companies. But one can’t overlook the contribution made by the country’s SMEs (small- and medium-sized enterprises). This contribution has by no means been small… or medium for that matter! SMEs are spread over diverse manufacturing and trading activities and contributed more than half of China’s tax revenues last year.
China’s SMEs are becoming increasingly attractive as investment options, with their high growth potential. In a recent development in this sphere, the global private equity arm of Robert W. Baird & Co., Baird Private Equity, set up Baird Capital Partners Asia (BCPA). The BCPA investment team is to focus on providing growth equity capital to smaller, high potential companies in China. Paul Carbone, Director of Baird Private Equity, said that while these smaller companies may have high potential, they have been widely ignored by the private equity that has flowed into China.
The International Network for Small and Medium Sized Enterprises (INSME), which is an international, nonprofit association for promoting innovation and technology transfer to SMEs, has organized its next annual meeting in China. This is definitely an indicator of where the action is these days! As part of the event, the INSME has organized talks on making greater capital resources available to SMEs, including from business angels.
China is by far one of the world’s most important economies. And SMEs are sure to remain critical to the country’s growth. The launch of the growth enterprise board would make IPOs and access to capital a lot easier for the SMEs in China.
* For series, references are published in the last installment of the series.
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