Advantages and disadvantages of joining WTO for small and medium-sized enterprises

The characteristics of small and medium-sized enterprises determine that they not only have the advantages of low management cost, meeting specific market demand and compatible internal incentives, but also have the disadvantages of low anti-risk ability, insufficient funds and lack of talents. In order to promote the development of small and medium-sized enterprises in China, small and medium-sized enterprises should accurately locate the market and products, improve their own management level and strengthen the construction of talent team; The government should create a good development environment for small and medium-sized enterprises, guide the formation and development of small and medium-sized enterprise clusters, and promote the construction of socialized service system to promote the development of small and medium-sized enterprises.

Keywords: advantages and disadvantages of SME development

The development of small and medium-sized enterprises can not only enhance economic vitality and increase national income, but also create more employment opportunities and promote social stability and progress. The development experience of many countries shows that the development of small and medium-sized enterprises is an important starting point to solve many economic and social problems. In recent years, China's small and medium-sized enterprises have developed rapidly and played an increasingly important role in the national economy, but they still face many difficulties and challenges. To promote the development of small and medium-sized enterprises in China, we should seek development countermeasures on the basis of analyzing their advantages and disadvantages.

Connotation and characteristics of small and medium-sized enterprises

Small and medium-sized enterprises are medium-sized and small-sized enterprises in theory, which are usually characterized by small assets, small sales, few employees and small management span. According to the characteristics of economic development in different periods, small and medium-sized enterprises are defined in detail in different countries. Definition is usually carried out from two angles: qualitative standard and quantitative standard. In terms of quality standards, it is mainly carried out from the sources of enterprise funds, corporate governance structure, corporate objectives, corporate legal forms and so on. In terms of quantitative standards, the selected indicators mainly include the number of enterprises, enterprise capital and annual turnover.

As far as China is concerned, the definition of SMEs has been adjusted several times. According to the Law of People's Republic of China (PRC) on the Promotion of Small and Medium-sized Enterprises promulgated in June, 2002, small and medium-sized enterprises refer to enterprises established in People's Republic of China (PRC) according to law, which are conducive to meeting social needs and increasing employment, and conform to the national industrial policy, and their production and operation scale belongs to various ownership and forms of small and medium-sized enterprises. In February 2003, the Notice on Printing and Distributing the Interim Provisions on the Standards for Small and Medium-sized Enterprises (State Economic and Trade Small and Medium-sized Enterprises [2003]143) stipulated that the Interim Provisions on the Standards for Small and Medium-sized Enterprises formulated specific quantitative standards for small and medium-sized enterprises, including industry, construction, transportation and postal services, wholesale and retail services, accommodation and catering services. Since then, the confirmation of enterprise types in China has been based on the statutory statistical data of the national statistical department.

Advantages and disadvantages analysis of small and medium-sized enterprises

(A) Advantages of SMEs

Low management cost. The long-term coexistence of enterprises of different scales shows that enterprises have different requirements for the optimal scale. Coase, an American economist, believes that the boundary of an enterprise depends on the balance between the enterprise and the market, that is, the marginal management cost of an enterprise is equal to the marginal transaction cost. Although the expansion of enterprise scale is conducive to reducing external transaction costs, it is followed by the increase of internal management costs, so the optimal scale of enterprises is not necessarily large-scale. This provides a foundation for the existence and development of small and medium-sized enterprises. Compared with large enterprises, small and medium-sized enterprises have small scale, simple organizational structure, relatively few management contents and relatively low management difficulty, so their management expenses are relatively low, which makes them have a strong competitive advantage in management expenses.

Flexible operation. Due to the different scale of enterprises, there are different requirements for information transmission within enterprises. Compared with large enterprises, small and medium-sized enterprises have smaller management span, fewer functional departments and higher degree of internal information symmetry, so they have short decision-making chain, simple coordination, fast information transmission and low distortion rate, and have their own advantages in rapid and accurate decision-making of enterprises. In addition, small and medium-sized enterprises need less investment, low entry threshold and low capital and technology composition, so the product production and marketing time is short, the effect is quick, the product transformation cost is low, it is easier to adapt to the new environment and the production and operation flexibility is great.

Meet specific market demand. With the development of economy and society, people's living standards are constantly improving, demand diversification is obvious, and the market is increasingly subdivided. Small and medium-sized enterprises can rely on their unique technical and resource advantages to provide targeted goods and services according to the needs of specific customer groups to meet the specific needs of marketization. Driven by the technological revolution, the specialized division of labor has become more and more detailed, and the industrial chain has been continuously extended. Small and medium-sized enterprises can give full play to their advantages in technology and experience in a certain field, undertake the production of parts or provide services for other enterprises, so as to give full play to their advantages in producing and operating specific commodities and form a mutually beneficial relationship with other enterprises.

Internal incentive compatibility. Internal incentive compatibility of enterprises mainly means that the behavior of managers pursuing their own interests is consistent with the goal of maximizing the interests of owners. In the case of separation of enterprise ownership and management rights, the goals between owners and operators are inconsistent, which leads to the principal-agent problem. Among them, the owner is the principal and the operator is the agent. Because of information asymmetry, it is difficult for the owner to master all the information of the operator and supervise it effectively, so the operator has the motivation to increase his own interests by harming the owner's interests. The owners and operators of small and medium-sized enterprises are mostly integrated, so there is no deviation between the goals of the owners and operators, and there is no internal incentive compatibility problem. Even for small and medium-sized enterprises with separate ownership and management rights, due to the lack of internal information, the supervision efficiency of owners on operators is much higher than that of large enterprises. It can be seen that SMEs have advantages in internal incentive compatibility.

(B) the disadvantages of SMEs

Low ability to resist risks. With the development of market economy, buyer's market has been formed in most fields, and the market competition is becoming increasingly fierce. Small and medium-sized enterprises are obviously inferior to large enterprises in utilizing economic resources, obtaining market information and striving for external support. At the same time, small and medium-sized enterprises have fewer barriers to technology and capital entry and more competitors. The existence of a large number of small and medium-sized enterprises makes the competition between them increasingly fierce. Therefore, when the market is turbulent and the financial crisis occurs, SMEs are often the hardest hit. The disadvantage of low anti-risk ability makes the failure rate of small and medium-sized enterprises, especially those that have not been established for a long time, higher.

Insufficient funds. In terms of loans, it is difficult for small and medium-sized enterprises to obtain bank loans because of their weak capital strength, insufficient collateral or pledge that meets the bank's preference and generally low credit rating. Compared with large enterprises, the loan scale of small and medium-sized enterprises is not large, while the bank's loan to small and medium-sized enterprises lacks scale benefit and the unit operating cost is relatively high, which undoubtedly reduces the enthusiasm of banks to provide financing to small and medium-sized enterprises. In addition, small and medium-sized enterprises do not hesitate to gain short-term benefits by damaging their own credit, and there are behaviors such as defaulting on interest, evading debts and maliciously owing taxes, which affect the overall credit image of small and medium-sized enterprises and further increase the financing difficulty of small and medium-sized enterprises.

Talent is scarce. Small and medium-sized enterprises have few people, weak strength and little social influence. Compared with large enterprises, they lack the advantage of attracting high-quality talents, which leads to the low quality of employees and the lack of management and technical talents. A large number of small and medium-sized enterprises belong to family enterprises, and important positions such as decision-making and management of enterprises are usually held by business owners and their family members, or close people. The closed nature of enterprise employment is obvious, which excludes external talents to some extent. As a result, arbitrary decision-making and experience management are common, and modern management, democratic management and strategic management are lacking. With the development of enterprises, the problems of low management level and weak business ability caused by the lack of talents in small and medium-sized enterprises are prominent.

Countermeasures to promote the development of small and medium-sized enterprises in China

(a) Enterprise perspective

Accurate positioning of market and products. Under the objective constraints of limited enterprise strength and resources, small and medium-sized enterprises should avoid blindly pursuing perfection, and develop themselves by meeting the market demand that large enterprises can't take into account and strengthening cooperation with large enterprises, especially in the aspects of "specialization", "specialization", "precision" and "integration". "Specialization" means avoiding diversification and enabling enterprises to use limited resources for a certain product or service; "Specialization" means to concentrate the superior resources of the enterprise and its location to run its own characteristics and better meet the specific needs of the market; "Refinement" means that enterprises fully tap their core technologies, make excellent products and establish their core competitive advantages; "Cooperation" means cooperation with other enterprises, including providing related enterprises with supporting production and services to take advantage of the situation, strengthening mutual cooperation with similar enterprises and avoiding vicious competition.

Improve their own management level. Since the reform and opening up, the rapid development of small and medium-sized enterprises in China has mainly benefited from historical opportunities and flexible operating mechanisms. With the transformation of China's economy from a closed and short state to an open and surplus state, the contradiction between the development and management of small and medium-sized enterprises is prominent. In this regard, small and medium-sized enterprises should pay attention to management innovation: first, strengthen enterprise strategic management, clarify enterprise strategic objectives, and formulate development strategies that are suitable for their own reality and have certain flexibility; The second is to improve the enterprise management system, standardize the behavior standards of managers, clarify the management functions, and ensure that the enterprise management work has rules to follow; Third, improve the management mode of enterprises, avoid the risk of highly centralized management decision-making power, realize the transformation from arbitrariness to democracy, from experience to science, from extensive to fine, and pay attention to using modern science and technology to master various advanced management methods in time.

Strengthen the construction of talent team. Small and medium-sized enterprises in China generally face the problem of talent shortage, and strengthening the construction of talent team is an inevitable requirement for small and medium-sized enterprises to achieve sustainable development. First, enterprise managers should strengthen their own learning, actively cultivate modern entrepreneurship, constantly pursue product innovation, technological innovation, organizational innovation and institutional innovation, effectively play the role of leading figures, and establish core values that meet the requirements of sustainable development for enterprises; Second, enterprises should improve the internal incentive mechanism, broaden the channels for employing people, pay attention to the combination of material incentives and spiritual incentives, and combine positive incentives with negative incentives, and actively explore ways such as employee stock ownership and option incentives to attract and retain talents; Third, enterprises should establish and improve the people-oriented corporate culture, strengthen the communication between operators and employees, respect the legitimate interests of employees, create conditions for employees to work happily, and create an atmosphere of teamwork, so as to stimulate the enthusiasm and creativity of employees and achieve a high degree of unity between employee interests and corporate core values.

(B) the government perspective

Create a good development environment for small and medium-sized enterprises. The development of small and medium-sized enterprises needs a good development environment to support. The promulgation of the Law on the Promotion of Small and Medium-sized Enterprises in People's Republic of China (PRC) provides a legal basis for promoting the development of small and medium-sized enterprises in China. According to this law, China should actively create a good development environment for small and medium-sized enterprises. At present, all localities should further speed up the clean-up of various administrative regulations, policy provisions and documents that are not conducive to the development of small and medium-sized enterprises; Further formulate relevant preferential policies to encourage and support the development of small and medium-sized enterprises; Further transform government functions, strengthen service consciousness and improve government efficiency; Further intensify efforts to rectify and standardize the market economic order and crack down on unfair competition; Further use various media to increase publicity, eliminate all kinds of misunderstandings and discrimination against small and medium-sized enterprises in society, and improve their social status.

Guide the formation and development of small and medium-sized enterprise clusters. Enterprise cluster refers to an enterprise group with agglomeration effect formed by a group of interrelated enterprises and various related supporting institutions in a specific regional space and a specific industry. In the cluster of small and medium-sized enterprises, market information about products, technology and competition spreads rapidly among enterprises, and a large number of professional management and technical talents gather, which helps to improve product quality and reduce production costs, improve the overall quality of employees and reduce employment costs, help to form the advantage of "location brand" and reduce marketing costs, thus helping to form economies of scale outside the industry, so that the advantages of small and medium-sized enterprises can be brought into play and the disadvantages can be avoided. The formation and development of small and medium-sized enterprise clusters is not only the result of market function, but also inseparable from the government's industrial policy orientation. At present, China's local governments should formulate strategic objectives and implementation plans for industrial development according to local resource endowment advantages and industrial comparative advantages, solve the problems that restrict the formation and development of small and medium-sized enterprise clusters, support the formation of potential and budding small and medium-sized enterprise clusters as soon as possible, and promote the upgrading of mature small and medium-sized enterprise clusters.

Promote the construction of socialized service system and promote the development of small and medium-sized enterprises. Personally, small and medium-sized enterprises are a group in need of help because of their weak strength and weak ability to resist risks. One way to help them is to establish a perfect social service system to serve them. At present, our government should strengthen the following work in promoting the construction of social service system: First, entrepreneurship service, actively guide social intermediary service institutions to provide entrepreneurs with entrepreneurship information, entrepreneurship consultation, entrepreneurship agency, entrepreneurship counseling and other services to improve the success rate of entrepreneurship; The second is credit guarantee, which mainly aims at the difficulty of financing and lending for small and medium-sized enterprises, improving the credit information system for small and medium-sized enterprises, developing high-level credit guarantee institutions, and making banks willing to provide loans for small and medium-sized enterprises; Third, technical innovation service, which encourages enterprises to innovate by setting up a technical innovation fund for small and medium-sized enterprises, improves the technical development ability of enterprises by training technical personnel of small and medium-sized enterprises, and helps them innovate by setting up a scientific research and technology center for guidance; Fourth, market development services, through holding various fairs and expositions, coordinating and organizing product matching with large enterprises, organizing overseas market visits and participating in international expositions, etc. Broaden the market services of small and medium-sized enterprises and solve the problem of insufficient sales channels for their products.

Influence of China's entry into WTO on China's small and medium-sized enterprises

1. As the WTO requires national treatment, small and medium-sized enterprises will enjoy the same treatment as large state-owned enterprises and foreign-funded enterprises in terms of industrial access.

The WTO requires that domestic enterprises be given the same national treatment. Under the historical background of encouraging foreign investment, foreign-funded enterprises actually enjoy super-national treatment because they enjoy preferential policies superior to domestic-funded enterprises; In the process of the state concentrating on "grasping the big" and solving the historical burden of state-owned enterprises, state-owned enterprises, especially large enterprises, also enjoy super-national treatment compared with small and medium-sized enterprises, especially non-state-owned enterprises. Therefore, according to the requirements of WTO, while realizing the unified national treatment of domestic and foreign-funded enterprises, it also brings a historical opportunity to solve the problem of non-national treatment of small and medium-sized enterprises, especially non-state-owned small and medium-sized enterprises. At present, China's relevant departments have announced the relaxation of industry access restrictions for small and medium-sized enterprises.

2. With the requirement of WTO to open China's capital market and allow foreign banks to enter, SMEs will have more channels and ways to obtain indirect financing and direct financing opportunities. The WTO demands that the capital market be liberalized and foreign banks be allowed to enter this city to engage in business, which will certainly intensify the competition in China's financial industry, especially among banks. This will definitely have a great impact on China's financial industry. The positive impact will be to promote domestic banks to improve their competitiveness by strengthening management, improving quality and improving services. The biggest beneficiary of bank's service improvement is small and medium-sized enterprises. At the same time, the entry of foreign banks has also opened up new channels for indirect financing of SMEs. It will be more convenient for small and medium-sized enterprises to use capital management to achieve low-cost expansion and internationalization through mergers and acquisitions.

3. Because WTO will promote the adjustment of global industrial structure, small and medium-sized enterprises with vitality and competitiveness will gain development space and opportunities and become indispensable partners of large enterprise groups and even multinational companies.

Joining the WTO will create new space for the generation and development of small and medium-sized enterprises, so that small and medium-sized enterprises can manufacture products that only large enterprises can manufacture in the past through mutual division of labor and cooperation. Production globalization and division of labor will also make more small and medium-sized enterprises become essential strategic partners of multinational corporations. After China's entry into WTO, due to the actual productivity level and large population, with the adjustment of global industrial structure, high-tech labor-intensive industries and labor-intensive production links in high-tech industries will be the advantageous areas for the development of small and medium-sized enterprises in China.

As WTO will accelerate the development of information technology and Internet, compared with the sales network of large enterprises in the past, small and medium-sized enterprises will be able to establish a beautiful marketing system at lower cost.

Joining WTO will accelerate the development of information technology and Internet, and narrow the capacity gap between small and medium-sized enterprises and large enterprises. Therefore, the biggest beneficiaries will also be small and medium-sized enterprises. With the arming of information technology and Internet, the region will no longer be a time-space restriction that restricts the development of small and medium-sized enterprises, which will enable them to compete with large enterprises. The development of Internet, especially e-commerce, will enable small and medium-sized enterprises to establish a marketing system comparable to the sales network of large enterprises in the past at a lower cost. Therefore, the marketing strategy of big enterprises and big groups to win by big will no longer be the only goal pursued by small and medium-sized enterprises.