CzechCham, in cooperation with Hawksford, hosted its 5th webinar on June 4, this time discussing the outlook for foreign invested SMEs in China and the importance of having crisis management in place. The webinar covered not only the topic of crisis management, but also provided specific examples of best practices throughout the COVID-19 outbreak and throughout past crises.
SMEs make up for more than 99% of all companies in China, and provide more than 80% of all jobs. From those, there are more than 60,000 FIEs in Shanghai alone, contributing to more than 25% of local GDP and 65% of the city’s total import and export. In short, solving the impact of the slowdown of foreign SMEs is key in order to cater to the future of China’s economy.
Our guest speaker, Mr. Fabio Stella, China Associate Director at Hawksford, shared the lessons learned by European manufacturers during the 2008-09 financial crisis, and he introduced tools that can be used to help facing this new challenge for a company’s operations in China.
The COVID-19 outbreak in late January took most companies by surprise, and the associated disruptions in supply chains, demand, and general operations had a considerably negative impact on businesses, especially on SMEs. One of the key lessons that we can derive from the current situation is the importance of having a sound crisis management plan in place.
Mr. Stella pointed out it was not not the first time for European multinationals, regardless of size, facing systemic shock (drop in orders, lack of forces to move forth), comparable to the global financial crisis more than a decade ago. Starting off, Mr. Stella described the FDI and SME environment in China related recent changes in doing business. Next, he talked about the outlook for the local economy with global recession scenario compared to what we had faced more than a decade ago. Recent economic development forced the authorities to push forward reforms, such as the new regulation as a reaction to a request for equal treatment towards foreign investment by governments based abroad, effective since January 2020.
With clients from 115 countries and 5 offices in China, Hawksford is a leading provider of a company formation, providing administration services and business support from small to medium-sized to large companies in Asia and Europe. We have more than 200 multilingual professionals in Asia and 450 globally. With 100 multilingual professionals based in Shanghai, Beijing, Suzhou, Guangzhou and Shenzhen we are able to offer the very best local knowledge to our international clients. We are experienced in meeting the regulatory compliance, tax, HR services and other outsourced needs of global clients who are seeking to invest in Asia.
Mr. Fabio Stella
Associate Director at Hawksford