China Trend # 1 – The Growth of Small- to Medium-Sized Enterprises
Prior to the global financial crisis, China’s state-owned enterprises (SOEs) had been in decline for over a decade. But with China’s $586
billion stimulus package and Chinese banks lending out around $1.3 trillion in 2009, SOEs benefited greatly as most of the funds filtered into municipalities
and SOEs controlled by municipalities.
But I believe in 2010 the binge spending on SOEs will come to an end, and that means China’s private sector companies will once again be on
the rise. That’s because entrepreneurial small- to mid-sized companies employ more than half of China’s labor force, and Beijing knows that government
policies need to support the private sector in order to stimulate employment and economic growth going forward. So, I think these small- to mid-sized
companies will do well in 2010 as the Chinese economy continues to recover.
One such company is Duoyuan Global Water Inc. (DGW). This
firm is the leading domestic water treatment equipment supplier in China, with three business segments including circulating water treatment, water
purification and wastewater treatment. Water treatment is essential in China, especially in the growing second-tier cities.