China’s SMEs development index dips 0.2 Points

China’s small and medium-sized enterprises (SMEs) witnessed a slight decline in business activity in May, with the Small and Medium Enterprises Development Index (SMEDI) dropping 0.2 points from April to 89.2.

Despite the monthly dip, the SMEDI remains above the previous year’s reading of 88.9, suggesting some overall growth for SMEs. However, the index remains below 100, which indicates a decline in overall vitality for the sector.

The SMEDI is comprised of several sub-indexes that provide a more granular view of SME performance. While the sub-indexes for labour force and business capital reached above 100, those for key areas like market sentiment, overall business operations, investment, and earnings performance all fell below 100.

The data indicates that SMEs in China are still facing challenges in terms of development confidence and market expectations. The survey highlights concerns about falling demand and high operating costs as key factors impacting business activity.

Attribution: Xinhua