Chinese small and medium-sized enterprises (SMEs) are encountering unprecedented challenges following China’s economic slowdown and its insistence on a zero-Covid strategy.
According to the China Small and Medium Enterprises Association, the country’s SME development index in May dropped 0.3 points from April—the third consecutive month the index has fallen.
Due to the lockdowns in major cities, many small and medium-sized enterprises had to lay off employees. The sharp drop in the laid-off employee’s income and not receiving compensation have seriously curbed spending even on essentials.
Apollo News reported that some small business owners in Shanghai said that the current passenger flow, logistics, and cash flow have almost collapsed. They said that the government’s so-called bailout was too late.
Earlier this month, on May 18, China’s State Council held a policy meeting to announce a bailout for the SMEs.
(Mr.) Ma is a small business owner in Shanghai. He said it is too late for the regime to pay attention to small and medium-sized private enterprises.
Ma said that many SMEs have given up. However, the remaining small part still has a breath and is ready to fight to the death—and use all the tools they can use to continue to live.
The business owner pointed to a grim outlook for Shanghai. Ma said he believes that many enterprisers will shut down in Shanghai, a group of investors will jump off the roof, and many high-tech talents and high-consumption forces will leave Shanghai.
In addition, young people will lose their jobs, hard-working people will go bankrupt, medical care personnel will be exhausted, and the economy will be depressed for five to ten years.
A survey on business confidence among SMEs in Shanghai was conducted in early May. It showed that 89% of the surveyed companies lost their business confidence or were about to shut down their doors.
Guan Hao, a doctor of administrative management at East China Normal University, headed a survey conducted over one week, contacting 2,603 enterprises.
According to the regime’s statistics, Chinese SMEs contribute more than 50% of tax revenue, creating more than 60% of China’s gross domestic product. In addition, they provide more than 80% of urban labor employment and account for more than 90% of the number of Chinese enterprises.