SMALL AND MEDIUM-SIZED ENTERPRISES IN PRC UNDER CRISIS
DOI:
https://doi.org/10.35774/jee2024.04.654Keywords:
сrisis, COVID-19 pandemic, interest rate, governmental policy, liquidity, loans, small and medium-sized enterprises (SMEs), PRC.Abstract
The research examines the effects of the ongoing global crisis on small and medium-sized enterprises (SMEs) in the People’s Republic of China (PRC). It emphasizes the underlying causes and the resultant challenges stemming from the contraction of export markets, which include diminished export orders, escalating operational costs, reduced productivity, an increase in business closures, a significant rise in unemployment, eroded investment confidence, disrupted funding channels, and limited resources. Furthermore, the paper provides an initial evaluation of the countermeasures implemented by the PRC government, particularly its support initiatives for SMEs, while also addressing the challenges encountered in the execution of these policies. The research offers policy recommendations aimed at enhancing the growth of SMEs, proposing relevant strategies such as tax reductions for SMEs, the enhancement of service frameworks, and the fortification of self-development mechanisms within these enterprises.
JEL: G01, H12, L53.
References
Asia Investment Strategy Team (November 25, 2024). China Outlook: Can China make it in 2025? J. P. Morgan, Private Bank. https://privatebank.jpmorgan.com/ apac/en/insights/markets-and-investing/china-outlook-can-china-make-it-in- 2025.
Brown, R., Rocha, A., & Cowling, M. (2020). Financing entrepreneurship in times of crisis: exploring the impact of Covid-19 on the market for entrepreneurial finance in the UK. International Small Business Journal, 38(5), 380–390. https://doi.org/10.1177/0266242620937464
Chowdhury, S. R. (2011). Impact of Global Crisis on Small and Medium Enterprises. Global Business Review, 12(3), 377-399. https://doi.org/10.1177/ 097215091101200303
Du, L., Razzaq, A., & Waqas, M. (2023). The impact of COVID-19 on small- and medium-sized enterprises (SMEs): empirical evidence for green economic implications. Environmental Science and Pollution Research, 30(1), 1540- 1561. https://doi.org/10.1007/s11356-022-22221-7
Guo, H., Yang, Z., Huang, R., & Guo, A. (2020). The digitalization and public crisis responses of small and medium enterprises: Implications from a COVID-19 survey. Frontiers of Business Research in China, 14, 19. https://doi.org/10.1186/s11782-020-00087-1
Kuckertz, A., Brandle, L., Gaudig, A., Hinderer, S., Reyes, Prochotta, C., et al. (2020). Start-ups in times of crisis a rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, e00169. https://doi.org/ 10.1016/j.jbvi.2020.e00169
National People’s Congress (2017). Law of the People’s Republic of China on the Promotion of Small and Medium-sized Enterprises. http://www.npc.gov.cn/ npc/c12435/201709/700912e2aeed405f815485892d935e16.shtml.
Liu, M., & Tai, H. (2020). Achieving the Resilience of Production Networks During Economic Crisis: The Case of Chinese SMEs. In: Anbumozhi, V., Kimura, F., Thangavelu, S. (eds.) Supply Chain Resilience. Springer, Singapore. https://doi.org/10.1007/978-981-15-2870-5_10
Liu, Qi (2013). The Study on the Financing Problems of Small and Medium Enterprises Under International Financial Crisis. Management & Engineering, 13, 76-82. https://www.proquest.com/scholarly-journals/study-on-financing-problemssmall-medium/docview/1618817740/se-2.
Ma, Si. (2021). Small firms recovering steadily. China Daily. https://www.chinadaily.com.cn/ a/202106/02/WS60b6de27a31024ad0bac2fb0.html.
Naradda Gamage, S. K., Ekanayake, E., Abeyrathne, G., Prasanna, R., Jayasundara, J., & Rajapakshe, P. (2020). A Review of Global Challenges and Survival Strategies of Small and Medium Enterprises (SMEs). Economies, 8(4), 79. https://doi.org/10.3390/economies8040079
China National Bureau of Statistics (2024). GDP Growth Rate. https://data.stats.gov.cn/english/easyquery.htm?cn=B01.
OECD (2024). People’s Republic of China. Financing SMEs and Entrepreneurs 2024. OECD Scoreboard, OECD Publishing. https://doi.org/10.1787/7c08f656-en
European Commission (2021). SME Annual Report – 2020/2021. https://ec.europa.eu/docsroom/documents/46062.
EU SME Centre (2021). SMEs in China: Policy Environment Report. 2021 Update. https://www.eusmecentre.org.cn/sites/default/files/attach/SME%20Policy% 20Environment%20Report%202021_FINAL_Jan2022.pdf.
Su, W., Guo, X., Ling, Y. & Fan, Y-H. (2022). China’s SMEs Developed Characteristics and Countermeasures in the Post-Epidemic Era. Frontiers in Psychology, 13, 842646. https://doi.org/10.3389/fpsyg.2022.842646
Xinhua (2021). China to create 1m innovative SMEs by 2025. The State Council of the People’s Republic of China. https://english.www.gov.cn/statecouncil/ ministries/202112/18/content_WS61bd149fc6d09c94e48a2643.html.
Received: October 22, 2024.
Reviewed: November 5, 2024.
Accepted: November 12, 2024.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
