Uncertain economic conditions make SMEs pressurized

Consumer confidence and business confidence have both fallen dramatically in Hong Kong amid worries of a deteriorating job market and gloomy global economic outlook. Hong Kong consumer confidence has declined to 99 points for the last quarter of 2011 from 107 at the start of last year, retreating to the same level in the fourth quarter of 2010. Business confidence among small and medium enterprises (SMEs) in Hong Kong dropped 12 index points year-on-year to 96 points in the last quarter, while corporates registered a steeper 22 points decline to 98 points, with 58 percent of SMEs and 68 percent of corporates expecting slowdowns due to global market uncertain conditions. The government has rolled out policies to help struggling small and medium-sized firms, many of them export-oriented manufacturers, who have been badly hit by declining demand due to the sluggish economic recovery in the United States, the euro zone's sovereign debt crisis, a steep rise in production costs and difficulties in securing financing. Some firms, especially small and micro businesses, faced increasing operational difficulties last year. Small companies in Wenzhou, Zhejiang, have gone bankrupt, with their bosses having gone into hiding or committing suicide because of financing difficulties. We have to give favorable policies to support SMEs enterprises and support E-business development since E-business could help SMEs to develop foreign trade business easily.