Evaluation Of The Competitive Advantage Of The Medium And Small Foreign-trade Enterprises In Zhejiang Province Under The Financial Crisis

Since the second half of 2008,a global financial crisis from the U.S. subprime mortgage crisis begin to effect the real economy, and it has spread to China. It brought vary degree of effect to various Chinese regions and enterprises. Especially to the coastal open cities. They suffered severely. The paper takes Zhejiang Province as an example to reevaluate what have happened about its competitive advantage under the financial crisis. And according to the problems in enhancing competitiveness, the paper will give some policy recommendations.At first, the paper reviews the theory on small and medium enterprises and the competitive advantage. With the Comprehensive theory, the paper describes the status on the competitive advantage of the medium and small foreign-trade enterprises in Zhejiang Province based on the Diamond, determinants of national advantage. Then analysis its strengths, weakness, opportunities, threats about competitive advantage to compare the change of the competitive advantage of the small and medium foreign enterprises in Zhejiang Province before and after the financial crisis. Its greatest competitive advantage lies in advantage of industrial clusters. In addition, it lies in the flexibility of mechanism. But with the implementation of the new labor law and the rise of the material prices, the cost advantage had disappeared. However, the state has issued various policies to support the small and medium foreign enterprises, and adjust export tax rebate rate continuously. So there still is room for development of foreign trade to Zhejiang small and medium enterprises. Secondly, the paper selects the revealed comparative advantage index to establish a mathematical model. I compare the small and medium sized foreign trade enterprises in Guangdong, Shanghai and Zhejiang whose foreign trade ranked top in the nation. It has found that the small and medium enterprises in Zhejiang Province have the stronger ability to resist the crisis faced the financial crisis. It was mainly due to the lower utilization of foreign capital relative to Guangdong and Shanghai. And compared with processing trade in Guangdong Province and Shanghai, general trade in Zhejiang Province has little effect on the international market. And their particular mode of product operation is also a reference for other provinces. Finally, I put forward some corresponding policy recommendations according to the problems which exist in the small and medium foreign enterprises of Zhejiang Province. Only the government, financial institutions and enterprises and other relevant departments work together, the small and medium foreign enterprises of Zhejiang Province can ride out the storm, and seize the opportunity to grow and develop.