SMEs headed for collapse, business lobby warns

China’s official business lobby for non-state companies published a warning that failure is looming for many of the nation’s small and medium-sized private enterprises and urged the central government to take steps to help the sector, the South China Morning Post reported. In a report sent to the State Council, the All China Federation of Industry and Commerce warned that China’s 7.5 million SMEs have been hit hard by recent credit tightening and that their situation is even worse than when the financial crisis began in 2008. Privately-held enterprises account for 80% of total employment in mainland China, and 50% of GDP. Huang Menfu, the federation’s chairman and vice-chairman of China’s top political advisory body, the CPPCC, told a conference in Guangzhou that top officials including Premier Wen Jiabao and Vice Premier Li Keqiang had already read the report and passed it on to relevant ministries.