China's small and medium-sized enterprises (SMEs) have closed out 2024 on a robust note, signaling strong economic resilience. According to the latest China SME Confidence Index released by Standard Chartered, the sector demonstrated significant improvements across key areas, including credit access, business expectations, and overall performance.
The manufacturing segment, a cornerstone of China's economy, saw its performance sub-index rise by 2 points to 52.2 in December, marking an eight-month high. This uptick was driven by sustained sales, production, and new orders, reflecting the sector's ability to adapt and thrive amid global challenges. On a quarterly basis, the performance index climbed by 0.6 points from Q3 to Q4, indicating ongoing expansion in manufacturing activities.
In addition to manufacturing, cross-border trading SMEs experienced a boost in their sales sub-index, reaching the highest level since April. This surge underscores the resilience of external demand and China's ability to maintain strong trade relationships despite global uncertainties.
While the manufacturing sector flourished, the real estate and construction SMEs initially acted as a drag on the non-manufacturing index. However, their recovery to above-50 levels in December highlights the positive impact of enhanced policy support aimed at stabilizing and invigorating these industries.
To further support SME growth, China has established a special relending facility worth 500 billion yuan. This initiative is designed to eliminate financial constraints, enabling SMEs to explore new markets, achieve technological breakthroughs, and develop innovative products. Access to capital remains a significant challenge for many SMEs, particularly those unable to provide collateral. In response, Chinese lenders have increasingly leveraged digital technologies, including artificial intelligence, to mitigate risks and extend credit.
MyBank, China's first digital bank and a subsidiary of Alibaba Group's Ant Financial Services, has been at the forefront of these efforts, providing credit to over 53 million SMEs across the country. This integration of technology and finance is not only facilitating easier access to funding but also fostering a conducive environment for SMEs to thrive in a competitive global market.
Reference(s):
cgtn.com
