China's SMEs index shows recovery in June

China’s Small and Medium Enterprises Development Index stood at 88.4 in June, up 0.2 of a percentage point from May, a recovery after declining for four months but still lower than the same period last year.

The SMEDI, a business index released by China Association of Small and Medium Enterprises, ranges from 0 to 200 with 100 the critical value showing the business situation is little changed. Values that fall between 0 and 100 suggest business is in decline. A value between 100 and 200 indicates business is in the ascent.

About 25.9 percent of SMEs have fully resumed production and more than 42 percent of them have resumed over 75 percent of their production, data from the industry association showed.

Only 7.7 percent of SMEs had not resumed production at all in June, 5.7 percentage points less than that in May, according to the data.

From the industry perspective, all sectors monitored by the index saw growth in June, led by catering services, up 0.6 of a percentage point, and information transmission and software, up half a percentage point.

The industry association said the SMEs have improved their market expectations and have more investment confidence now. Their liquidity stress has been eased in general, though they are still faced with relatively high cost pressures.