China’s vulnerable small businesses have had it up to arrears – they need to be paid as policies fall short, survey finds
- Shrinking market demand and outstanding billables continue to plague small and micro-sized Chinese firms, leaving struggling owners feeling lost at sea
- Reports of unsustainable cash flows are rising, threatening sector that is considered vital to employment as debt concerns mount
China’s small businesses say shrinking market demand is their biggest pain point, while payment delays are also compounding the challenges facing their daily operations, according to recent findings by Peking University.
The results, based on a survey of 9,252 small and micro-sized firms across the country in December, reflect how the country’s beleaguered economy has yet to elevate the employment-vital sector to its pre-pandemic levels.
“A significant factor contributing to the operational challenges of small and micro-sized enterprises is the substantial proportion of outstanding receivables,” said the quarterly report, which has been tracking the operations of small businesses since 2020.
Among the surveyed enterprises, 71 per cent reported having outstanding receivables, with construction and manufacturing industries being most seriously affected.
The average value of arrears reached 103,000 yuan (US$14,300), representing around two-thirds of the quarterly income for small and micro-sized businesses.
