Understanding SMEs: Roles in Trade, and Cross-Border Payment Solutions

Ⅰ. The Definitions of SMEs in Different Countries

The definitions of SMEs (Small and Medium Enterprises) are various in different countries and regions based on indicators such as the number of employees, turnover, and total assets of an enterprise. These definitions are critical for SMEs to access government support, financing opportunities, and policy incentives. Below are the definitions of SMEs and their characteristics in different regions.

Europe

In the EU, SMEs are subdivided into microenterprises, small enterprises, and medium-sized enterprises. Microenterprises are defined as those with fewer than 10 employees and a turnover or total assets not exceeding €2 million; small enterprises are defined as those with fewer than 50 employees and a turnover or total assets not exceeding €10 million; and medium-sized enterprises are defined as those with fewer than 250 employees or total assets not exceeding €43 million. This classification provides a uniform standard for identifying SMEs across the EU.

The United States

In the U.S., the Small and Medium Enterprise Administration (SBA) categorizes businesses based on industry and business size. In the manufacturing industry, businesses with up to 500 employees are considered SMEs, while in certain mineral extraction industries, the maximum number of employees can be up to 1,400. From an asset perspective, the U.S. Internal Revenue Service (IRS) defines businesses with total assets of up to $10 million as small businesses.

Canada

In Canada, SMEs are categorized as micro, small and medium-sized enterprises. Micro businesses are those with 1-4 employees; small businesses are those with 5-99 employees; and medium businesses are those with 100-499 employees. This categorization helps the Canadian government to develop appropriate support policies for enterprises of different sizes.

China

In China, the definition of SMEs is mainly based on the business revenue, number of employees or total assets of an enterprise, and the criteria vary from industry to industry. For example, in the retail industry, SMEs are required to have 10-49 employees and an annual revenue of at least RMB 1 million, while in the real estate development industry, SMEs are required to have an annual revenue of between RMB 1 million and RMB 10 million and total assets of between RMB 20 million and RMB 50 million. This way of defining industry segments reflects the diversity and complexity of the Chinese economy.

Ⅱ. What is the role of SMEs in international trade?

Small and medium-sized enterprises (SMEs) play a crucial role in international trade. The following are the specific roles of SMEs in international trade and their importance.

First, SMEs promote economic growth and employment. They account for 90% of the global business landscape and provide more than 60% of jobs, and are an important contributor to global employment. In international trade, the active participation of SMEs could lead to the development of related industrial chains, thus creating more employment opportunities.

Secondly, SMEs are directly or indirectly involved in international trade through their participation in global value chains. They can provide intermediate products for large enterprises, thus exporting indirectly, while at the same time establishing supply chain partnerships with large enterprises, taking on some of the production, distribution and service functions and improving their own competitiveness. Such participation not only promotes trade balance, but also enriches product supply.

SMEs also excel in promoting innovation and technology diffusion. They have strong market adaptability and innovation capacity. By participating in international trade, SMEs could bring innovations to the global market and promote the diffusion and application of technology.

Finally, SMEs have contributed a lot in reducing trade costs and improving efficiency. Through the Internet platform, SMEs can communicate and transact with global customers more conveniently, reducing intermediate links and lowering transaction costs. In addition, through implementing systems such as AEO (Accredited Operator), the customs of some countries and regions have provided SMEs with customs clearance facilitation, improved the efficiency of cargo clearance, reduced trade time costs and enhanced their competitiveness in the international market.

Ⅲ. Recommended Cross-Border Payment Platforms for SMEs

Below is a list of recommended cross-border payment platforms for small and medium-sized enterprises (SMEs), including detailed descriptions of XTransfer and other popular platforms. Each platform has its characteristics, and SMEs can choose the most suitable cross-border payment solution according to their needs.