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English>>China Business

MSMEs' confidence growing, report finds

By Ji Beibei (Global Times)

09:59, November 22, 2012

An index tracking growth in micro, small, and medium-sized enterprises (MSMEs) suggests increasing confidence about the economy in China, a report jointly released by the Bank of Communications and Fudan University said Wednesday, although the outlook for export-based MSMEs in South China is less promising.

The growth index climbed to 102.86 points for the first half of 2012 from 100 points over the second half of 2011, "suggesting a recovery in confidence about the economy by MSMEs in general," Sun Jinyun, project manager of the report, told the Global Times Wednesday.

The report surveyed some 1,028 MSMEs in 21 cities across China. MSMEs are highly sensitive to the economic environment and a crucial contributor to employment.

The growth index is based on surveys of business performance, confidence over operations and predictable risks, according to Sun.

Sentiment toward the economic climate in China improved over the first half of the year, due to both external and internal factors, he noted.

"Externally, easing inflation, improved financing and supportive measures by governments contributed to confidence. Internally, MSMEs improved management and made adjustments in operation after undergoing a slowdown in growth in the second half of 2011," said Sun.

But despite the generally positive sentiment, MSMEs in South China are less confident, and there are concerns for businesses that rely heavily on exports, as they are highly vulnerable to plunging overseas demand. The growth index for MSMEs in the region dropped to 96.50 points in the first half of 2012 from 100 in the second half of 2011, the report said.

Some said the picture is less rosy than the report suggests. "Small and medium-sized enterprises in Wenzhou have even less confidence than last year," Zhou Dewen, director of the Wenzhou Council for the Promotion of Small and Medium-sized Enterprises, told the Global Times.

"Their capital problems remain, with many facing suspension of production," said Zhou.

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