Mumbai: The small and medium-sized enterprises (SMEs) in China, numbering over 40 million, are powering the country's giant leap in foreign trade and GDP growth, official reports said.
They make up about 99.6 per cent of China's enterprises and accounted for 70 per cent of the country's total foreign trade worth $1, 422.12 billion last year, according to the China Small and Medium Enterprise Index of Economic Development released by Nankai University in the northern city of Tianjin.
The study, commissioned by the National Development and Reform Commission, the nation's top planning body and the finance ministry, shows that nearly 60 per cent of China's gross domestic product (GDP) was generated by small and medium-sized enterprises last year.
SMEs account for more than 48.2 per cent of the country's taxation revenue and 60 per cent of the total sales volume. SMES also employ seventy-five per cent of urban-based employees, the study showed.
SMEs are also witnessing huge capital inflows with the banks operating in major mainland cities stepping up their efforts to court them.
As the financial sectors will be further deregulated soon and large businesses have more ways to find financing, banks are being forced to take a fresh look at SMEs, whose management and financial systems are often considered as less stable.
The China Banking Regulatory Commission said in mid-September that the outstanding value of loans to smaller business entities increased $17.78 billion (141.2 billion yuan) from the start of the year. The amount of loans granted to China's SMEs exceeded $330 billion ( 2.64 trillion yuan) in the first half of the year.
About 778,600 SMEs have been granted credit from banks, up 15,900 from the start of the year, the regulator said.