Unlike cases elsewhere in the nation, many SMEs in the province of Guangdong are overseas invested.

Of the 11,665 sampled SMEs, 4,557 are invested by Hong Kong, Macao and Taiwan businesses and 1,749 are invested by foreign firms, compared to the 5,357 SMEs invested with domestic capital, according to the evaluation research report of growing industrial SMEs in Guangdong Province.

Of the 6,295 growing industrial SMEs, 3,460 are funded by overseas investors including those from Hong Kong, Macao and Taiwan, and 2,835 are domestic-funded.

And of the top 500 SMEs in the province, 251 are overseas invested, with the remaining 249 domestically invested.

Lan Hailin, head of the school of business administration of South China University of Technology, said that the high percentage of overseas-funded SMEs in the province agrees with the province's foreign-oriented economy.

He said, overseas-funded SMEs have bigger growth advantages than domestically invested ones.

Lan also pointed out that privately owned enterprises make up a dominant part of the domestically invested SMEs in the province.

"In a sense this reflects the provincial authorities' successful strategy to encourage the development of private business," he said.

Of all the 5,357 domestically invested SMEs sampled, 2,304 are privately owned; of the 2,835 domestically invested growing industrial SMEs, 1,200 are privately owned; and of the 249 domestically invested SMEs in the province's top 500 SMEs, 102 are privately owned.

Lan said the province's SMEs are densely located in the Pearl River Delta, and those in the Pearl River Delta have seen more satisfactory business performances than those in other regions of the province.

Of the province's top 500 SMEs, 76.4 per cent, or 382 SMEs are located in the Pearl River Delta region; 11.8 per cent, or 59 SMEs are in the east of the province; 8.2 per cent, or 41 SMEs are in the west; and 3.6 per cent, or 18 SMEs are in the north.

Those SMEs in the Pearl River Delta outpace their counterparts substantially in terms of sales volume, profits and assets.

Citing the research in the report, he said, SMEs involved in energy production and supply are maintaining rapid development while those involved in equipment manufacturing have great growth potential.

However, he pointed out, those SMEs involved in the province's traditional manufacturing industries ranging from paper and paper products, food, non-metal mineral products, handicraft, transportation equipment, plastics and stationery do not have outstanding growth advantages.

And those SMEs involved in new and high-tech industries or labour-intensive industries have no better prospects than those in the traditional manufacturing industries, he added.

"The high technological threshold, the demand for hefty capital input for research and development (R&D) and the limited fund-raising channels are all among the reasons for the bleak development of SMEs in the new and high sector," Lan explained.