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Although the index remains below the boom-and-bust line of 100, it marks a reversal in the downward trend seen since Q2 2021. The sub-indexes for all eight major sectors rose in Q1, according to the China Association of Small and Medium Enterprises (CASME).
CASME attributed the rise to China’s overall recovery and expanding market demand, which has boosted SMEs’ confidence in business development and improved their market expectations. The association also noted that SMEs’ capital shortages had eased. Despite this, CASME warned of the difficulties of rising labour and housing costs and called for efforts to improve the business environment, ensure policy continuity, stability, and transparency.
CASME secretary-general Xie Ji said the improvement in Q1 was due to the gradual resumption of production and stronger policy support. He also noted that 56 per cent of companies were operating at over 75 per cent capacity in Q1, up 25 percentage points to a one-year high. CASME’s survey revealed that China has increased investment in key projects since the second half (H2) of 2022, which has created new development opportunities for SMEs in the industrial chain and enhanced their confidence.
“In the first quarter, the production and operation of enterprises, economic benefits, and market conditions have been improved. Especially, the enterprise confidence index has risen sharply, which has laid a good foundation for future development. A positive economic growth rate is expected to be maintained in Q2,” Xie was quoted as saying by local media reports.
The SME development index is based on a survey of 3,000 SMEs from eight major industries.
Fibre2Fashion News Desk (NB)