China Watch Blog has learnt that small- and medium-sized enterprises in the western region of China were more vulnerable than those on the east coast given the deteriorating external market and tightening internal environment last year.
Bank of Communications and Fudan University jointly announced today the growth index of SMEs in the second half of 2011, saying the companies expanded slower at 96.91. A figure above 100 means expansion and a reading below 100 indicates contraction, the China Daily reported.
The report noted different patterns of business development in different regions. Companies in the south, east and central regions expanded slightly in the second half of last year. The expansion was attributed to favorable financing, tax rate, and government support, as well as the regional economic advancement gained over the years.
The northeast region stayed level while western territories saw a significant contraction among small businesses, which registered a reading as low as 85.12.
“The western areas lag relatively in economic development. The SMEs there are less profitable than competitors in the coastal areas. They have been severely impacted by the sluggish economy in general,” the report said.
A sub-index suggested that SMEs were more adept at countering risk despite higher raw material and labor costs, a bigger tax burden, and environment constraints.
The report said the confidence index of 98.24, although below 100, was much better than other sub-indices, indicating entrepreneurs are not too pessimistic about market prospects.If you think China Watch Blog's information is useful, click on cup of coffee on left hand side and make a small contribution via PayPal