Thu, Jan 20, 2005 - Page 10 News List

Most SMEs expect a bumper 2005, survey findings say

By Jessie Ho  /  STAFF REPORTER

Small and medium enterprises (SMEs) in Asia are expecting a bumper year this year, but weak cash flows, dissatisfaction with loan providers and emerging competition from China pose threats, according to a survey released by logistics operator United Parcel Service Inc (UPS) yesterday.

The report, UPS Asia Business Monitor, is the company's first annual survey of SMEs in Asia, and is intended to be a barometer of the changing opinions, attitudes and habits of decision makers from the region's SMEs, which account for a big percentage of businesses in the region.

The report surveyed more than 1,200 executives of SMEs in Taiwan, China, Japan, India, Australia and seven other countries between Aug. 16 and Sept. 28 last year.

"We conducted the survey to provide UPS and our customers with a better understanding of the needs and concerns of SMEs in the region," said Benjamin Choi (蔡永瓏), managing director of UPS' Taiwan branch.

The survey found that most SMEs are optimistic about the economic outlook this year, and many are planning to expand personnel to meet demand. In Taiwan, 57 percent of SMEs polled said their business will grow in the next 12 months, while 40 percent are considering hiring.

A significant 88 percent of those polled see the information technology and telecommunication industries as the most important sectors driving economies in the region, followed by the financial and logistics industries.

Insufficient cash flow is the biggest problem for SMEs, 23 percent of respondents said. The concern is caused partly by dissatisfaction with Asia's credit and finance providers, the report said.

With China having emerged as the fastest-growing economy in Asia, most SMEs believe the middle kingdom is best poised to capitalize on future growth, with 73 percent of respondents indicating Chinese SMEs as being the most competitive.

In view of China's growing influence, one-fifth of those polled said they have set up a joint venture or established their own businesses in the country.

However, two-thirds of those surveyed expressed no plan to set foot in the market, citing a poor intellectual property rights environment, inadequate financial transparency and frequent government intervention.

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