China’s Small and Medium-sized Enterprises (SMEs) have showcased strong growth, signaling economic resilience as the country moves into 2025. According to the latest China Small and Medium Enterprise Confidence Index released by Standard Chartered, the SME sector ended 2024 on a strong footing, with activity picking up in December.
The index evaluates the status and development of China’s SME sector based on three main sub-indexes: credit, expectation, and performance. For the manufacturing sector, a cornerstone of the Chinese economy, the performance sub-index of manufacturing SMEs rebounded 2 points to 52.2 in December, reaching an eight-month high as sales, production, and new orders remained robust. On average, the performance sub-index increased by 0.6 points from Q3 to 51.3 in Q4, indicating further expansion in manufacturing activity.
In addition, the sales sub-index for cross-border trading SMEs edged up to its highest reading since April, reflecting resilient external demand. Despite some challenges, particularly in the real estate and construction sectors, there has been a notable recovery. The performance sub-indices of real estate and construction SMEs recovered to above-50 levels in December, demonstrating the positive impact of enhanced policy support for SMEs.
To eliminate constraints on SMEs’ growth and enable them to expand markets, achieve technological breakthroughs, and develop new products, China has created a special relending facility worth 500 billion yuan to support science and technology innovation and technological transformation. Access to capital is one of the significant challenges faced by SMEs due to their inability to provide collateral, making it difficult to secure credit.
In response, Chinese lenders have leveraged digital technologies, including artificial intelligence, to mitigate risks and provide credit to SMEs. MyBank, China’s first digital bank and a subsidiary of the Alibaba Group’s Ant Financial Services, has provided credit to more than 53 million SMEs in China. This approach has facilitated financial inclusion, enabling SMEs to contribute significantly to the economy.
The continued growth and support of SMEs highlight China’s commitment to fostering economic resilience and innovation, positioning the Chinese mainland for sustained development in the coming years.
Reference(s):
cgtn.com
