Two senior Chinese entrepreneurs told a forum in Guangzhou Monday that small and medium enterprises should try to focus on their basic area, rather than extend into diversified sectors.

Although every entrepreneur dreams of developing more business sectors, for small and medium enterprises, the most important thing was to remain stable, said Mao Liyang, president of the Ningbo Fotile Kitchenware Co.

Since 1996 when it was founded, Fotile has stuck to a single-brand focusing only on kitchware. Its brand value is now nearing 2 billion yuan ( US$ 250 million).

"This is the result of our specialization policy," Mao said.

Yu Xiaochang, vice president of Glanz, the flagship of the Chinese microwave oven industry, said that in foreign countries, no one enterprise would branch out into another sector before its main sector had attained a competent edge.

"Only by avoiding doing something can one be successful in doing other things, and that has been what Glanz has stuck to when upgrading its business structure," Yu said.

The China Small and Medium Enterprises Summit Forum, part of the on-going First China Small and Medium Enterprises Fair (CSMEF), was attended by hundreds of government officials, scholars and entrepreneurs.