Speech at the Briefing Conference to 2nd China Small & Medium Enterprise Fair

 and Sino-France Small & Medium Enterprise Fair,

for Foreign Organizations in Guangzhou.

Deputy Director of

The Economic and Trade Commission of Guangdong Province,

Liu Xiaojie

April 29th, 2005

Distinguished guests,

Friends from the press,

Ladies and gentlemen,

Good morning£¡

Today, we are honored to invite officials from foreign consulates general in Guangzhou, and representatives from foreign chambers of commerce and trade associations, and leading foreign corporations in Guangzhou, to participate in this briefing conference. By this opportunity, please allow me to express a warm welcome to all guests and participants, representing the organizing committee of 2nd CSMEF. In the following, I would like to make a briefing report of the preparation stage of 2nd CSMEF.

Chapter One

Great success of the first CSMEF

The 1st China Small and Medium Enterprise Fair (CSMEF), which was jointly sponsored by National Development and Reform Commission, State Administration for Industry and Commerce and Peoples Government of Guangdong Province, had been successfully held on October 18th ¨C 22nd, 2004 in Guangzhou. Besides the China Export Commodities Fair, CSMEF is another big exhibition event in Guangzhou which is jointly held by various national departments. The Chinese government show great concerns and expectations on the CSMEF, while Mr. Zeng Peiyan, Vice Premier of the State Council of the Peoples Republic of China, expresses congratulations by sending us a congratulation letter. The Fair accommodated delegations from some 30 China¡¯s provinces, autonomous regions, municipalities directly under the Central Government, Hong Kong S.A.R. and Macao S.A.R, and over 1,950 exhibitors. Over 118,000 person-time of participants from over 50 countries and regions visited, purchased and made business talks in the Fair. Therein, the number of foreign purchasers reached 5,600. Over 13,600 projects were signed, with total business value of over RMB 32 billion, or USD 3.8 billion. The Fair consisted of exhibition and other supporting events like senior forums, talks on SME financing, promotion sections of logistics, training sections for SMEs, and scientific and technologic outcome release. It has set up an excellent service platform for Chinese SMEs, and provided them with positive factors on further boarding their eyesight, seeking trade opportunities and exploring native and overseas markets. The first CSMEF was welcomed by SMEs and highly affirmed by all circles of the community. SMEs and guest purchasers who benefit from the Fair were surprised by the abundant and wonderful supporting events, strong enthusiasm by exhibitors, huge crowd of participants, and great business value.

Chapter Two

New high lights of the 2nd CSMEF

The 2nd China Small & Medium Enterprise Fair and Sino-France Small & Medium Enterprise Fair will be held on September 12th ¨C 15th, 2005 in Guangzhou International Exhibition Center. Ministry of Finance PRC, Ministry of Commerce PRC, and Ministry of the Economy, Finance and Industry, France are newly added in the sponsor list of the 2nd CSMEF. In comparison with the first CSMEF, the second has some new high lights as follow:

1. A larger-scale fair with characteristics of comprehensiveness and profession.

It is a comprehensive fair with exhibition sections that are set up according to the main industry and products which SMEs are specialized in. It has total exhibition area of over 130,000 square meters, and 6,000 exhibition booths, 4,000 more than the previous fair. Based on the industrial characteristics of SMEs and the exhibition layout, there are 10 sections at the fair, namely electronics & IT products section, commodities sections, leather section, textiles & garments, household electrical appliances section, foodstuff & beverage section, medicine section, machine section (fittings for autos and motorbikes), ceramics section, and French SME section.

The characteristic of comprehensiveness, on one hand, reflects that the Fair is a comprehensive one with exhibition sections that are set up according to the main industry and products which SMEs are specialized in, showing the special features of SMEs¡¯ products, business and technology. On the other hand, this characteristic highlights the abundant and meaningful content. The 2nd CSMEF comprises of a series of supporting events like exhibition of SMEs¡¯ products and technology, business talks, transaction, and Senior Forum on Sino-France SMEs.

The characteristic of profession shows that exhibitors from every section are respectively recruited and collocated by associations and professional organizations of relevant industry, who also guarantee the level of exhibitors and quality of their products. In another word, every section is regarded as a profession exhibition of a certain industry. On the other side, this characteristic reflects that every supporting event is planned and organized accurately in a professional standard.

2. Multi-functional events and creative modes.

In order to better utilize all sorts of materials and create brands, the CSMEF consists of several supporting events under the guidance of government, with the service from promotion agencies and participation of SMEs, which may establish a platform of layout, transaction, exchange and cooperation. During the Fair, a series of supporting events will be held, such as Senior Forum on Sino-France SMEs, Programs Promotion Section for Sino-France SMEs, Briefing Seminar of Purchasing, Talks on SME Financing, and training seminars for SMEs. Hence, by conducting these multi-functional events, the CSMEF will become a comprehensive fair that provides overall service for SMEs.

3. Sino-France cooperation ¨C the first step of building up global reputation.

In the 2nd CSMEF, a French SME section is specially established, which will accommodate over 300 French SME for exhibition. This indicates that the CSMEF launches its first step of going global and building up reputation worldwide. During the Fair, senior officials, experts and entrepreneurs from both Chinese and French sides will participate in the Senior Forum on Sino-France SMEs, Programs Promotion Section for Sino-France SMEs and other events. All of these are made to strengthen cooperation, communication, and complementary on product and technology advantages between Chinese and French SMEs. Before the Fair open, we will organize some mutual visits between Chinese and French SMEs, in order to explore trade, investment and economic and technological collaboration, to create Sino-France cooperation opportunities, to reach a win-win situation, and to push forward the ¡°going global¡± practice of China¡¯s SMEs. We expect that there will be more countries and regions that are interested in jointly sponsoring CSMEF in the future.

4. A gathering of thousands of businessmen, with plenty of business opportunities.

In order to guarantee exhibitors¡¯ benefits in the Fair, we will invite a wide range of important businessmen and guests, including China¡¯s large retail corporations, leading department stores, purchasers from some key wholesale market and regional professional distributing centers, purchasers from multi-national retail corporations, UN purchasing organization, and etc. Moreover, local and foreign SME promotion associations and agencies are also invited to participate in the Fair. Hereby I would like to sincerely invite officials from all consulates general and representatives from all foreign chambers of commerce to participate in the Fair, and request for your assistance to invite entrepreneurs, investors and purchasers from your country to seek for opportunities of exchange and cooperation in the Fair.

Chapter Three

Preparation job of the organizing committee

All sponsors show great emphasis on the 2nd CSMEF, by regrouping the organizing committee and drafting the general scheme and other practical work plans of the Fair. Directors of the organizing committee are:

- Ma Kai, Director of National Development and Reform Commission, PRC;

- Jin Renqing, Minister of Ministry of Finance, PRC;

- Bo Xilai, Minister of Ministry of Commerce, PRC;

- Wang Zhongfu, Director of State Administration for Industry and Commerce, PRC.

- Huang Huahua, Governor of People¡¯s Government of Guangdong Province.

We will coordinate and work closely with departments and organizations concerned, to do excellent preparation for the 2nd CSMEF, in accordance with the general scheme and other practical work plans. At present, all preparation work is processing orderly.

On the other hand, French officials are also paying great attention to the Fair. Both Minister Francoin Loos, who are responsible for foreign trade from Ministry of the Economy, Finance and Industry of France, and Minister Christian Jacob from Ministry of SME of France show great concerns to the Fair. Representing the French side, Mr Loos signed a memorandum with the Chinese side. At present, the French side is also positively doing relevant preparation work in line with the memorandum.

Until now, the organizing committee has been putting emphasis on the following three missions:

Firstly, we invite a wide range of businessmen and investors through various channels and by various modes. As we recognize, for a large-scale exhibition, business visitors and professional audience are as important as exhibitors, or even more important in some sense, because their quantity and quality are significant factors that measure the success of an exhibition. This is an important piece of experience in international exhibition industry. Therefore, we attach importance to the issues on how to attract investors and to organize professional audience. We do this work in three ways. The first way is to request the assistance from China¡¯s associations of various industries. When we entrust these association to recruit exhibitors, we also entrust them to organize a number of professional audience to take part in the Fair. For these associations, they have good relationship with customers in related industry and they must have less difficulty in organizing a group of professional audience because they have experience in hosting all sorts of exhibition. The second way is to widen the attraction channels, by fully exerting the functions and advantages of the Ministry of Commerce PRC. The third way is to widely invite native and foreign trade and logistics enterprises, foreign investors, multi-national retailers and purchasers and purchasers from key wholesale market and regional distributing centers, by various investment attraction modes, such as direct contact, assistance from agencies, on-line ads, publicity ads, and etc.

Secondly, we are preparing well and planning precisely for the project connection between Chinese and French SMEs. On the base of good preparation work, we will painstakingly organize mutual visit between Chinese and French SMEs. The first SME delegation will visit France in early May, attend the 16th Sino-France Conference, and held Talks on Sino-France SME Economic and Trade Cooperation, where Minister of Commerce PRC Bo Xilai and minister of French ministry concerned will attend and make speech. Meanwhile, we will keep organizing two or three delegations to visit France before the Fair opens. According to the memorandum, the French side will organize SME delegation to China before the 2nd CSMEF. Besides, during the Fair, we will specially arrange spots for Chinese and French SMEs to communicate and make business talks. By doing these, we can further promotion cooperation between both sides.

Thirdly, we perform comprehensive publicity and positive promotion and upgrade the image of CSMEF. Publicity is of extremely great importance for investment attraction, image promotion, reputation enhancement and brand upgrade of an exhibition. According to international experience, the cost of publicity is about 20% of total cost for a mature exhibition, and 30%, or even 40% for the new one. So we will pay more attention to publicity and promotion task. On the one side, we put more expenditure to publicize the 2nd CSMEF, and actively adopt various types of media to advertise, such as local television, broadcast, newspaper, journals, the Internet, professional magazines, outdoor ads, and foreign media. By doing these, we introduce the significance, high lights and characteristics of the 2nd CSMEF, promote its brand, upgrade its reputation, strengthen media popularity, and create a good atmosphere. On the other side, we better improve CSMEF¡¯s official website, in order to make it as the platform providing latest information for enterprises and all circles in the community and the platform for information exchange and mutual promotion.

Chapter Four

SME ¨C an eternal topic of economic development

Nowadays, the importance of developing of SME is increasingly recognized by international communities. Including China, many countries and regions regard the promotion of SME development as an important policy, while some of them have  achieved success in this business. Since the reform and opening-up policy was introduced, China¡¯s SMEs has been developing vigorously. At present, SME accounts for 99% of the number of all enterprises in China, employs 75% of total labor force in China, and contributes over 60% of total export value and over 55% of GDP. Therefore, SME has become a significant force of China¡¯s economic growth, market prosperity and employment solution. As the tendency of globalized economy strengthens and local and foreign markets continuous adapt to each other after China became WTO member, China¡¯s SMEs are facing unprecedented historic opportunities. With the motivation of the Chinese Government, we reasonably believe that China¡¯s SMEs must be more widely taking part in global division of work and global market competition, and making contribution to the world¡¯s economic growth.

As the host of the 2nd CSMEF, Guangdong Province is one of the regions with greatest economic strength in China, and ranks first in term of integrated economic strength. In 2004, Guangdong¡¯s GDP reached RMB 1,604.8 billion (or USD 194 billion), 11.8% of the total GDP in China. Guangdong is one of the largest international manufacturing bases in China, with a tremendous manufacture system combined with 400,000 manufacturers. This system mainly consists of some leading industries like electronics and IT, electro-mechanics, petroleum chemicals, steel industry, automobile, and etc. Guangdong is one of the most vigorous regions for foreign trade and investment in China. In 2004, Guandong¡¯s export value reaches USD 357.1 billion, 31% of the national total. Up to 2004, actual utilization of foreign capitals accumulates for over USD 180 billion, within which utilization FDI values USD 150.5 billion, around 25% of the national total. Guangdong is one of the regions with highly developed traffic and telecommunication facilities. Expressway runs through all 21 municipalities in Guangdong. Guangzhou Baiyun Airport, which is one of the largest three airway hubs, is located in Guangdong, together with other six airports, some 150 ports, over 3,000 docks container loading, and over 1,100 shipping lines with more than 130 countries and regions in the world.

Guangdong¡¯s SMEs have been achieving rapid growth in this excellent environment. At present, there approximately 700,000 SMEs in Guangdong, which are mainly specialized in textile, garment, chemical raw materials and products, plastic products, non-metal mineral products, metal products, electro¡ªmechanics and instrument manufacturer, telecommunication equipment, computer and other electronic equipment, and etc. More than 40% of Guangdong¡¯s SMEs are involved foreign (including Hong Kong, Macao, and Taiwan) investment, most of whose products are for export. The high proportion of foreign-oriented SME is a noticeable characteristic of Guangdong¡¯s SMEs. SME has become an important force of economic growth in Guangdong, by contributing over 70% of industrial added value, profit payments and tax turnover, and providing almost 90% employment opportunities. Hence, Guangdong Province will keep carrying out the policies of ¡°positive support, strengthening guidance, improved service, stick to regulations, and privilege grantee¡± for SMEs, and create favorable environment for SMEs.

Distinguished guests and friends, the CSMEF provides all SMEs with a platform of ¡°layout, transaction, exchange and cooperation¡±, with a good wish of ¡°Feel the heavy weight of the small and understand the essence of SME¡± for every participants. Representing the organizing committee of the CSMEF, I hereby make an earnest promise that we will provide service of best quality, and exhibit the best enterprises and products to the outside world. The 2nd China Small and Medium Enterprise Fair will be a pragmatic, ceremonious, creative and progressive event for international cooperation.

Once again, hereby I would like to sincerely invite friends and guests in circles of industry and commerce, trading, finance, science and technology, and the press from all countries and regions, Hong Kong, Macao and Taiwan, to participate in the 2nd China Small and Medium Enterprise Fair, for promoting the development of SMEs in China and all over the world.

Thank you very much