China’s small and medium-sized enterprises (SMEs) continue to face an uphill battle, with their economic performance still lagging behind pre-Covid levels, according to the latest reading from a semi-official index.
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In September, the SME Development Index, which surveys 3,000 businesses across eight major industries, fell to 88.7, the lowest level in a year and well below the pre-pandemic quarterly average of 92.9 in 2019.
The index’s threshold for stable economic conditions is 100, and a reading below 100 indicates a downward or deteriorating economic trend for SMEs.
“The survey of SMEs indicates that the external environment is becoming increasingly complex and challenging, while domestic demand is gradually recovering and policy effects are slowly being realised, with positive factors on the rise,” the China Association of Small and Medium Enterprises said in a report published on Thursday.
“It is crucial to accurately understand the difficulties and challenges faced by SMEs, intensify macroeconomic adjustments, deepen reform and opening-up … [to] create more opportunities for SMEs and private enterprises, boosting their internal drive and growth potential.”
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China’s SMEs have been hard hit by the nation’s sputtering economic growth, and their confidence has been dampened by half-hearted government support and sweeping and abrupt regulatory shifts in private sectors such as real estate, video gaming and off-campus education since 2021.
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