China’s small and medium-sized enterprises (SMEs) are bouncing back from the coronavirus, according to a survey Standard Chartered sent to the Global Times on Tuesday.
The survey of hundreds of SMEs across China suggests that SMEs’ business activity continued to improve in July despite severe flooding in central and southern China.
This month the Headline Small and Medium Enterprise Index (SMEI), an index of performance of SMEs, rose to 53.9 from 53.3 in June, the first year-on-year increase since February.
In terms of sectors, manufacturing continues to lead the overall recovery while services saw an accelerated pace of recovery in June and July, according to the survey.
The industries once hit hard by the coronavirus, such as transportation, real estate, catering and accommodation, showed upward momentum amid the easing of lockdown measures and recovering domestic demand.
Meanwhile the export outlook and hiring have also improved as orders continued to expand in July with the headline index for export-oriented firms jumping to 57.0 from 53.6 in June.
As the impact of the pandemic ebbs, SMEs have survived the most difficult period, Cong Yi, a professor at Tianjin University of Finance and Economics, told the Global Times Tuesday.
“China’s intelligent epidemic prevention methods such as the health codes provide sound support for the resumption of work and production of SMEs, particularly those in the service industry,” he said.
However, the SMEs still need time to fully recover and deal with problems such as capital flow, which is vital for their survival, he noted.
In the second half of the year experts predicted that SMEs will continue to get back on track as China’s economy shows an improvement trend.
“The economic growth is expected to increase further in the second half of the year. The third quarter is likely to see a GDP growth rate of 5-6 percent, basically returning to the level of the pre-pandemic period, which comes as good support for SMEs,” he said.
However, experts noted that the pandemic also comes as a watershed for SMEs as it accelerates the industrial structure adjustment.
“SMEs need to pay attention to industrial structure adjustment and integration of new technology and industries in order to survive the post-virus period,” he said.
(In association with Global Times)