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SMEs to help drive economic recovery

By Cheng Yu | China Daily | Updated: 2021-03-10 08:58
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China's ongoing antitrust efforts will greatly promote the development of small and medium-sized enterprises, industry insiders said.

The development is recognition that SMEs are robust drivers of the country's digital economy and will aid economic recovery amid the COVID-19 outbreak, they added.

"For any country, the ultimate goal of the digital economy drive is to benefit every participant in the internet ecosystem, including SMEs, to help them reap the benefits," said Cai Yuezhou, director of digital economy research at the Chinese Academy of Social Sciences' Institute of Quantitative and Technical Economics in Beijing.

"If the country regulates and supervises monopolistic behavior that abuses market advantage, especially those who leverage data to extract surplus value, it will promote the development of SMEs and further drive the digital economy," he said.

Cai added that the moves are in line with the requirements of supply-side structural reform in which the nation has vowed to work harder to promote higher quality, greater efficiency and more robust drivers of economic growth through reform. Also, from the demand side, they will meet people's ever-growing desire for better lives.

"As online platforms or leading companies command a dominant position in the ecosystem, China's anti-monopoly measures are expected to promote the healthy growth of the internet ecosystem," he added.

According to the Ministry of Industry and Information Technology, SMEs are the main driving force of the country's productivity. Around 50 percent of national tax revenue and 60 percent of GDP come from them. They are also responsible for 70 percent of technological innovation and 80 percent of urban employment, it said.

Wang Peng, associate professor at the Hillhouse Research Institute at Renmin University of China, said: "Antitrust measures will largely stimulate SMEs to innovate more, as they are increasingly being recognized for their role as leaders of technological innovation. Currently in China, many concepts and new business models are pioneered by them."

Wang said China's "platform economy" comes on the heels of faster-than-expected development of the internet sector, where limited regulation allowed some giants to achieve expansive growth.

"Restricting monopolistic behavior is not aimed at helping a company to stand out but to encourage businesses, including SMEs, to leverage product, content or technology to generate fresh growth engines," he added.

Industry insiders noted that SMEs will play a leading role in accelerating economic recovery and development in the face of challenges brought by the COVID-19 epidemic.

Data from the China Association of Small and Medium Enterprises show that SMEs have recovered quickly, despite the COVID-19 challenges last year.

The SME Development Index, based on a survey of 3,000 businesses, reported gains or flat growth for six straight months last year.

Wang Xiaolu, senior researcher with the National Economic Research Institute, said: "SMEs are the main driving force of the country's productivity and the main stabilizer of employment and the industrial chain. Supporting them will be crucial in reducing vulnerability and ensuring a steady economic recovery in the coming months."

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