China's Small and Medium Enterprises Development Index, an index gauging the development of China's small and medium-sized enterprises (SMEs), stood at 89.0 in July, unchanged from June, according to data released by the China Association of Small and Medium Enterprises (CASME) on Sunday.

An industry analyst said that the stable reading of the index reflects the positive trajectory of China's SMEs and the resilience of the broader economy amid global uncertainties, including those sparked by US tariffs. The reading serves as an indication that a range of the government's pro-growth measures have continued to offer strong support.

Compiled from a survey of 3,000 SMEs across eight major sectors, the index saw rises in six sectors and declines in two sectors. In July, the sub-indexes for construction, transportation, real estate, social services, information transmission and software, and accommodation and catering industries saw significant increases, increasing by up to 0.6 points, compared with the previous month, data showed.

The sub-indexes for the industrial and wholesale and retail sectors posted slight declines of 0.2 and 0.1 points, respectively, compared with the previous month. Overall industry performance remained on an improving trend, according to the association.

Generally speaking, July's index showed that SMEs operated on a stable footing: expectations were steady, demand leveled off, funding conditions improved, and labor demand was unchanged while supply eased, investment intentions rebounded, costs fell and profitability held firm, according to the CASME.

However, the report also noted that the external environment remains highly uncertain, domestic demand grew relatively slowly, and extreme weather conditions occurred in various areas in China in July. Still, SMEs remained broadly stable and continued to advance under pressure, it said.

"We must take comprehensive measures to deepen economic-system reform, unlock domestic demand, boost services-consumption growth, energize private investment, and keep employment, enterprises, markets and expectations on an even keel. We must support private enterprises and SMEs in innovating and developing, improving quality and efficiency, and achieving a successful conclusion of the 14th Five-Year Plan period 2021-25," the CASME's report said.

Sustained policy support from last year and expanding demand have continued to yield benefits, boosting China's economic growth. Combined with holiday-driven consumption and other factors, these measures have helped to enhance the production and operations of SMEs, Hu Qimu, a deputy secretary-general of the Forum 50 for Digital-Real Economies Integration, told the Global Times on Sunday.

A stable industry performance reduces market uncertainty and avoids fluctuations caused by frequent adjustments, Hu said, noting that the impact of July's extreme weather on SMEs was primarily felt in the supply chain, cultural tourism, and production areas, all of which have an impact on SME operations.

Hu noted that China has introduced a range of supportive policies for private companies and small firms. These include consumer vouchers, e-commerce subsidies and targeted guidance on phasing out obsolete capacity, which are loosening capital constraints, lifting sentiment and injecting fresh momentum into SMEs. Meanwhile, expansionary monetary and fiscal policies that were introduced last October have entered a dividend phase and are beginning to deliver tangible results, said Hu.

Hu also highlighted the recent release of guidelineson implementing the nation's Private Sector Promotion Law by the Supreme People's Court, which outlined measures in five areas to provide judicial support for the growth of the private sector. These are expected to address challenges faced by private businesses and offer stronger legal safeguards for their development.

As of the end of 2024, China had more than 60 million SMEs, and industrial SMEs generated 81 trillion yuan ($11.2 trillion) in revenue, according to the Ministry of Industry and Information Technology.

China has cultivated more than 140,000 SMEs that use specialized, sophisticated technologies to produce novel and unique products, including 14,600 elite "little giant" firms, official data showed.

(Source: Global Times)