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    Half Tones

    China’s Small Businesses Struggling to Resume Operations, Survey Finds

    May 20, 20200

    China’s small businesses are lagging behind larger firms as they strive to return to normal operations, raising concerns about their survival in the current post-pandemic period, a survey on the health of domestic businesses revealed.

    According to the survey conducted by China Merchants Bank, the country’s small businesses — defined as those employing fewer than 50 people — had resumed only 40% of their operations by late April. Meanwhile, larger companies — those with more than 100 employees — said they were operating at at least 70% of their output capacity.

    The data collected from 23,524 companies — over 90% of which had fewer than 100 employees — found that tight cash flow and financing pressures remain common headaches for Chinese businesses struggling to reach previous productivity levels. Firms in first-tier cities including Beijing and Shanghai were especially pessimistic about their financial outlooks, with the hospitality, restaurant, education, and entertainment sectors reporting the most economic pressure.

    Over 90% of the surveyed businesses said they had slashed staff or salaries, with only 10% of respondents saying they planned to increase investment in the first half of the year. Earlier this month, China’s Cabinet pledged to allocate 1 trillion yuan ($140 billion) in government bonds to support small businesses struggling to stay afloat during the COVID-19 pandemic.(Image: People Visual)