The impact of the financial crisis on China, as early as 2005 and 2006, RMB appreciated and raw materials rose. Many small and medium-sized enterprises in the Pearl River Delta and the Yangtze River Delta have no scientific and technological strength, such as clothing, shoes and hats, hardware and toys. I'm afraid that tens of thousands of enterprises such as Dongguan have withdrawn their capital and moved to Guangxi Province, which is a new economic zone. It is difficult for small and medium-sized enterprises to develop greatly at present, because Rome was not built in a day. These conditions of small and medium-sized enterprises are caused by the rising cost of raw materials, the weakening of export price advantage caused by the appreciation of RMB, and the tightening of credit policy adopted by the state. Many small and medium-sized enterprises have little funds of their own and rely on credit. In many places in the Pearl River Delta, enterprises can tide over the difficulties after defaulting on wages. Now with the implementation of some livelihood security policies and the new labor contract law promulgated by the central government in 2007, the punishment for wage arrears is very serious, and there are a series of safeguard measures for employees to sign contracts and dismiss. These measures have both good and bad aspects for enterprises. There are many reasons why small and medium-sized enterprises have difficulties in survival and do not make money.

Like many small and medium-sized enterprises in Shanghai, many of them are Korean and Japanese, and they quit immediately before they could make a profit. I'm afraid it's difficult to change this. The main measure may be their current business. By loosening monetary policy and reducing taxes, these enterprises will survive first. If this is done, it will not get worse, and the situation will get better after one year or six months.

China Opportunity of Financial Crisis

From my understanding of all aspects, this American economic problem has a great influence on our domestic economic situation. On the one hand, in the export field, we know that China's trade surplus is close to half, mainly from the United States. If the US export market shrinks greatly, it will naturally have an impact on the wheels of China's export-driven economy. On the other hand, in some financial fields, buying American financial institutions and corporate bonds has a great influence. In recent days, as we all know, CIC has suffered a great loss in the United States, which is our domestic loss.

But from another angle, I have been doing research on this issue recently, and I feel that it should be a great opportunity for China's economic development, whether it is the overall macro-economy or the development of small and medium-sized enterprises. Why do you say that? There may be several backgrounds to discuss together. The first background, including the measures taken by the United States to force the RMB to appreciate rapidly and restrict China's export products, is realistic, but I think China is still quite abundant as long as the external environment allows us to develop according to normal rules of conduct. In the short term, the export of primary processed products may be affected, but at this time, China's export structure can be forced to upgrade. As long as there is this trend in this external market, I believe that domestic small and medium-sized enterprises, including large enterprises, will be able to upgrade their products. Of course, a time buffer may be needed, which leads to the second question. From the central government and all aspects, the macro-decision-makers will seize this opportunity well and try to provide a buffer opportunity for small and medium-sized enterprises and large exporters in China.

Careful observation shows that the appreciation of RMB against the US dollar stopped in mid-July this year, and there was a moderate depreciation. This is a far-sighted strategic decision, which can have two functions. The first function is to prevent the impact of the sharp appreciation of the US dollar on China's exchange rate reform on August 8. We can turn over the history and find that many countries, including Japan, including South Korea and Germany, which have carried out exchange rate reform, can find that in the first stage of exchange rate reform, when countries change from appreciation to depreciation against the US dollar, most of them will have a fatal impact, which Japan, South Korea and Germany have experienced. In China, from all aspects of horizontal comparison, it should be the first case, that is, the reverse appreciation of the US dollar has a great buffer release effect on the risk of staggered reverse depreciation of the RMB. In recent August, the US dollar appreciated sharply, including the sharp drop in international oil and agricultural products prices, but China's exchange rate has been relatively stable, which is a milestone in China's exchange rate reform. Secondly, we also know that the slowdown of RMB appreciation during this period has given China's small and medium-sized enterprises, especially export-oriented enterprises, a great buffer and breathing space. I am also here to give a suggestion to small and medium-sized enterprises, that is, to control the RMB within the current appreciation range before the end of the year. As long as there is no major financial turmoil in China, the RMB may depreciate slightly. Small and medium-sized enterprises can make full use of this opportunity to arrange export production in the fourth quarter. A large exchange rate policy should be of great reference value to small and medium-sized enterprises.