China’s SMEs continue on slow path to recovery

Strengthening support for the private sector from the government has led to a small increase in business for the country’s small and medium-sized businesses, new figures show.

China’s small and medium-sized enterprise development index edged up 0.1 point to 89.4 in August, reflecting continued recovery in the sector.

The China Association of Small and Medium Enterprises said that the index, generated based on the performance and expectations of 3,000 SMEs.

The indexes for the industry, transportation and storage, wholesale and retail, and accommodation and catering sectors saw a rebound last month. The industrial sector, in particular, has seen growth for three consecutive months, with figures for production and domestic and overseas orders both soaring.

Shuidi Credit, a credit evaluation service provider from Shanghai, has seen its business revenues grow more than 30% year-on-year over the past months.

Yang Maojiang, the company’s general manager, said most of the companies it serves are reporting increased confidence in their operations as well as for future growth.

This confidence was reflected in the indexes for macroeconomy, market and operations, which edged up 0.3 points, 0.2 points and 0.1 point respectively, compared with the previous month, said the China Association of Small and Medium Enterprises (CASME).

Ma Bin, executive vice-president of the association, said: “The confidence of SMEs continues to be boosted as China launched a series of guidelines to promote the development and growth of private enterprises, along with a series of fiscal, taxation and financial policies to support the real economy and activate the capital market.”

In China, SMEs generate almost 50% of the country’s tax revenue and 60% of GDP. They also contribute to 70% of the nation’s technology innovation and are responsible for 80% of urban employment.

However, the association warned that the country’s SMEs faced a number of challenges, including global economic uncertainties and higher costs, and called for further initiatives to grow domestic demand and improve the business environment.

China looks to strengthen ties with the EU

China’s relationship with the EU will improve as the two entities continue to strengthen ties and improve cooperation, according to Chinese Premier Li Qiang.

In a meeting with European Commission President Ursula von der Leyen at the Group of 20 summit, Li described China and Europe as two major forces in the world economy and major engines of global development.

And he called on both sides to offset uncertainties in the international landscape with the stability of China-Europe relations.

Li said China is working with Europe to host the China-EU Summit this year, deepen mutual trust and improve communication and consultation, and jointly make more positive contributions to global peace and development.

The Chinese premier said that “risk prevention as well as co-operation is not mutually exclusive”, adding that “people should not simply equate interdependence with insecurity, nor should they overstretch the concept of security and politicize economic issues”.

China’s development and openness bring opportunities, not risks, to Europe and the world, he said.

Li also expressed the hope that the EU will uphold the principles of market economy and fair competition, keep its trade and investment markets open, and provide a fair, transparent and non-discriminatory environment for Chinese companies to invest and operate in Europe.

“China is willing to further deepen green partnership with Europe, strengthen dialogue and cooperation in such fields as clean energy and green finance, and provide support for developing countries in tackling climate change,” he added.

The EU’s Von der Leyen said that, since the beginning of this year, exchanges between Europe and China have been continuously strengthened and yielded positive results.

The EU is willing to strengthen dialogue and cooperation with China in various fields to jointly tackle climate change and other global challenges, she added.