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SMEs at the heart of Fengxian's economy

FENGXIAN has taken a different path than other Shanghai districts in developing its economy, choosing to focus on small- and medium-sized enterprises that are privately owned. Tan Weiyun reports.

As the cradle of Shanghai's private economy, Fengxian District plays an increasingly important role in the city's economic development and is becoming the country's new hub of small- and medium-sized enterprises.

So far the district's SMEs account for 99.9 percent of the total number of enterprises, contributing 95 percent of the district's tax revenue.

They have integrated into the district's nation-rated export processing zone and seven large-scale industrial parks engaged in new materials manufacturing, new energy development, biomedical research and development, chemical engineering, yacht manufacturing, power transmission and distribution, electronics, medical services, logistics and modern agriculture.

Yuan Xiaolin, the district government's spokesman, says: "Fengxian doesn't benefit much from the heavy, large-scale industry and doesn't get much support from big projects. Thus, SMEs, especially those privately owned, have become the district's bread and butter."

Since 2006, a series of preferential policies have been launched to foster and support SMEs.

More than 20 million yuan (US$3.1 million) is granted each year to encourage technical innovation, talent retention and brand building.

Subsidies worth another 20 million yuan are available for energy saving and consumption reduction.

The towns and industrial parks, at the same time, work with the local government. Nanqiao Town has established a special 1 million yuan foundation to award innovative enterprises each year.

Fengxian is also the city's first to set up a service center for SMEs, offering free consulting and lectures. A hotline helps the companies raise funds or apply for SME special grants from the central government as well as giving advice on stock market listings.

Financing is often the biggest problem holding back the development of SMEs. In 1999 the Fengxian Loan Center for SMEs, the city's first financial institution of its kind, was set up to help them raise funds. So far the center has granted more than 535.8 million yuan in loans.

Then with the help of the local government, three finance houses and a village bank affiliated to Shanghai Pudong Development Bank were established, offering more financing channels for SMEs.

During the global economic crisis in 2008, one third of China's solar energy factories were forced to shut down. However, Chaori Solar, based in Fengxian District, escaped the financial storm.

It received a loan of more than 10 million yuan from the loan center, which solved its cash flow problem and allowed it to stay in business.

As of the end of 2010, the loan center and finance houses have helped more than 790 SMEs raise over 600 million yuan.

Fengxian held the 3rd China SME Forum in 2009, attracting more than 800 representatives from throughout China.

Fengxian now boasts 48,459 SMEs, accounting for 99.9 percent of enterprises in the district. These SMEs employ more than 350,000 people.

In 2007, with the approval of the Shanghai Municipal Government, Fengxian set up the SME Business Headquarters Zone as one of the city's 20 modern tertiary industrial hubs.

The zone will be developed into a modern, diversified and first-class facility for business people, especially those from its neighboring Zhejiang Province. It will feature cheaper rents and lower logistics and labor costs compared to Shanghai's other financial zones like the Xujiahui Central Business District and the Lujiazui Financial Zone in the Pudong New Area that have attracted many multinational companies.

The zone in Fengxian will be a wiser choice for SMEs.

In the district's core area of Nanqiao New City, the zone's construction is in full swing. The zone has attracted companies such as China Union Pay. At the same time a high-tech enterprises incubator was set up.

The headquarters project, covering an area of 1.47 square kilometers, includes a Central Business District, a 110,000-square-meter China SME Tower and a 300,000-square-meter plaza, funded by Shanghai Nanfang International Group.

Nanfang International Tower, a new landmark in Fengxian, has already lured enterprises such as Agricultural Bank of China, China National Petroleum Corporation (China's largest oil and gas producer and supplier), Shanghai Heng Yuan Xiang Group (one of the country's top wool companies) and many others.

Nanfang International Plaza, with an investment of almost 5 billion yuan, will include office buildings, apartments, star-rated hotels, high-end department stores, a home-decor market, a shopping promenade and a leisure square.

The first-phase construction of the plaza was completed in 2008, and some projects such as Nanfang International Tower and Nanfang Brilliance Nanqiao Shopping Center (first phase) have opened, creating more than 3,000 jobs.

The plaza's second phase of construction was finished last September, which created more than 5,000 jobs. In April, the Nanfang International Plaza was awarded one of the Top 10 Urban Complexes in China. When the whole project is completed, the annual sales volume is estimated at 3 billion yuan, contributing to more than 300 million yuan in tax revenue and over 20,000 jobs.


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