The Private Enterprises Association in the city of Ningbo, east China's Zhejiang Province, recently conducted a survey of more than 180 private businesses all over the city in terms of their current situation, financial demands and operation burdens in the first three months of this year.

Haitian Plastics Machinery Ltd., located in Ningbo City, Zhejiang Province, turns to domestic market after its order amount in the fourth quarter of 2008 was sharply reduced. (Source: haitian.com)

The aim was to understand the real difficulties businesses are facing amid the international financial crisis, and thus help them deal with the crisis and tide over difficulties.

Businesses surveyed

The private enterprises included in the survey were mainly labor-intensive and export-oriented businesses. They included 47 mechanic and electronics manufacturers, 40 electronic appliance producers, 20 metal enterprises, and 37 rubber and plastic firms. The other businesses came from the service, textile, communications, chemical and food industries.

Classified by general assets, there were 73 enterprises valued at less than 10 million yuan, 76 between 10 million and 50 million yuan, 20 between 50 million and 100 million yuan, and 17 above 100 million yuan.

Most show confidence

The survey showed that 63 enterprises, or 33.9 percent of the total number surveyed, experienced an increase in both income and profit last year; 46 enterprises, or 24.7 percent, saw a slight or no rise in revenue and a profit decrease; and 77 enterprises, or 41.4 percent, witnessed a decrease in both income and profit, or even a loss.

The first three months of this year showed that 57 enterprises (30 percent of the total surveyed) experienced an increase in both orders and exports compared with the same period in 2008; 26 enterprises (14 percent) remained at the same level; and 103 enterprises (56 percent) suffered a decrease in both orders and exports.

Among the businesses surveyed, 47 considered their management situation good enough; 120 considered it basically good; and 19 preferred to suspend or partially suspend their production.

Over 90 percent of these enterprises have a rational understanding of the impact of the global financial crisis, believing that the current difficulties are temporary. Many of them are taking measures to deal with the crisis by reducing costs, and they all express confidence in the future of their industries.

Difficulties in financing

In terms of financial demands, 26 percent of the businesses surveyed have a large gap in capital and are in urgent need of financing; 49 percent have a small gap in capital and need financing, and 25 percent have no capital gap and need no financing.

For the source of financing, most of these enterprises chose "their own capital" or "bank loans." Only four enterprises chose other financing means, such as "bank discount," "venture capital" and "government innovative fund."

Among the businesses surveyed, 58 percent said it was "very difficult" or "difficult" to obtain bank loans; 37 percent said it was "easy to get loans, depending on the specific situation." Nine enterprises, less than 5 percent of the total, thought there was no difficulty in getting a loan.

It is worth noting that businesses with large capital gaps who consider it difficult or very difficult to get loans are generally small and medium-sized enterprises with less than 30 million yuan in assets. This reflects a common problem that these enterprises are facing -- financing difficulty.

"The global financial crisis has had a serious impact on the export-oriented and labor-intensive enterprises in the city. But most of these enterprises have a clear understanding of the crisis," Zhu Kangwen, Secretary General of the Private Enterprises Association, told Southeast Business Daily.

"In view of this financing difficulty, the Association will cooperate with the Ningbo Bureau of the China Banking Regulatory Commission and Southeast Business Daily to hold the first business fair for small and medium-sized enterprises on March 20," he said. "This fair will serve as a platform for enterprises and banks, which will broaden the financing channels for these enterprises and promote direct talk and operation between banks and enterprises."