China’s small and medium-sized enterprises (SMEs) have kicked off the new year on a positive note, reporting improved business performance in January, according to the latest industry index released on Wednesday.
The Small and Medium Enterprises Development Index, which surveys 3,000 SMEs across eight major industries, rose to 89.2 last month, up from 89 in December and surpassing the reading from the same period last year, as reported by the China Association of Small and Medium Enterprises.
The growth in the index is attributed to accelerated production at the beginning of the year and increased consumer demand leading up to the Spring Festival, China’s most significant traditional holiday.
“Stepped-up pro-growth policies have bolstered companies’ confidence in the future,” the association noted in its report. Reflecting this optimism, the sub-index measuring SMEs’ confidence in the macroeconomy climbed to 98.8 from 98.5 in the previous month.
The festive season ignited domestic demand, which helped lift the sub-index for market vitality to 81.2, up from 80.8 in December. This indicates that consumers were more active, and businesses witnessed heightened sales activity during this period.
However, despite the uptick in market demand and sales, SMEs are still grappling with high operational costs. The report highlighted that while the current trends are encouraging, cost pressures remain a significant challenge for smaller businesses.
The Small and Medium Enterprises Development Index includes several sub-indexes to gauge the performance and expectations of SMEs. A reading above 100 reflects an upward trend in business, while a reading below 100 indicates reduced vitality.
As China continues to implement supportive policies aimed at stimulating economic growth, SMEs are expected to play a crucial role in the country’s economic recovery and development in the coming months. The positive indicators from January suggest a promising start to the year for these enterprises.
Reference(s):
cgtn.com
