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Small and Medium Enterprises (SME)take an indispensable role in China's social and economic development. With economic globalisation and the coming of the information age, talent mobilities have been enhanced greatly. Manpower is a shared but scarse resource that plays a critical role in the process of technological and managemental innovations. Since its accession into the WTO, China has become an integral part of the global economy. SME,as an essential component of China's national economy,is taking an incresingly prominent role in China's economic development and system reforms and becoming an important force that drives China's rapid economic growth. SME faces many opportunities and challenges when it takes part directly in the gobal competitions while more foreign goods are imported into China. What determines the survival of SMEs in the fierce competition is their competitiveness, which depends heavily on human resources. However, brain drain is severe among talents in SMEs in China, becoming a prominent hindrance to the rapid development of SMEs.

This article examines the current situation of brain drain among Chinese talents in SMEs,anaylizes its impacts and reasons and explores possible solutions to stimulate the growth of SMEs in China.