Beyond Tech: How China’s SMEs Can Survive Global Shifts

From Factories to Frontiers: The New Era of Chinese Innovation

China’s private sector is at a crossroads. While giants like Huawei and BYD dominate headlines, 90% of the nation’s private enterprises are SMEs—often overlooked but vital to the economy. As global trade tensions simmer and innovation becomes a survival skill, how can these smaller players thrive? We chatted with Cambridge’s Christoph Loch for answers.

Innovation ≠ Rocket Science

Loch busts a myth: \"High-tech isn’t a magic wand.\" While AI and quantum computing grab attention, he argues small, daily improvements matter more. Think streamlining workflows or tweaking products—changes that can slash costs by 10-15% annually. \"That’s how costs halve every seven years,\" he says.

Survival Tips: Frugality + Exploration

With global growth slowing, Loch advises SMEs to:

1. Embrace frugality: Optimize resources without big investments.
2. Go hyper-local: Leverage China’s massive domestic market.
3. Look east (and south!): ASEAN trade jumped 8.1% in early 2024, proving emerging markets are golden opportunities.

Trade Wars ≠ Game Over

Despite U.S.-China tensions, Chinese SMEs still export globally. Loch notes \"polarization creates new allies\"—countries eager to partner with Beijing. Private firms now handle 54.6% of China’s trade, with firms eyeing India, Africa, and South America.

Bottom line? Adapt or sink. As Loch says: \"Not all will succeed, but the hustlers? They’re rewriting the rules.\"

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Inside, outside and the future: What should China's private sector do?

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