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The number of small and medium-sized enterprises (SMEs) inChina has exceeded 40 million,accounting for 99 percent ofthe country's total enterprises. Chineseand foreign experts estimate that SMEsare now responsible for about 60 percentof Chinas industrial output and employabout 75 percent of the workforce in Chi-nas cities and towns. SMEs are responsi-ble for creating most new urban jobs, andthey are the main destination for workerslaid-off from state-owned enterprises thatre-enter the workforce.