Chart of the Day: Seven-Year Struggles of Small, Midsize Enterprises Continue

At a time when China’s economic prospects are looking increasingly unpredictable, the government can see the Small and Medium Enterprises Development Index (SMEDI) as a reliable constant. However the index has been constantly poor.

Graphic: Gao Baiyu

The SMEDI, which gives a snapshot of the operating conditions of small and midsize enterprises, has hovered around 93 this year. A reading of 100 separates a positive environment from a negative one. The higher above 100, the better the conditions, while the further below 100, the worse the conditions.

The index, compiled by the China Association of Small and Medium Enterprises, surveys firms in the eight industries that are judged to make the greatest contribution to the country’s gross domestic product. The index has been under 100 since the third quarter of 2011. But so far, 2018 has seen better readings than 2015, 2016 and 2017.

Compared with the National Bureau of Statistics’ indexes, which survey the broader business climate and entrepreneurial confidence, SMEDI shows that small and midsize enterprises have had a more difficult time than their larger counterparts.

Small and midsize enterprises face a long list of hurdles, including rising labor costs, heavy taxes, and limited access to financing. In the past few weeks, authorities have repeatedly pledged that they will step up their support for struggling private enterprises. So far, the policies introduced by authorities have centered on providing cheaper and easier financing.

Contact reporter Charlotte Yang (yutingyang@caixin.com)