Positive Signs Emerge for China’s Small Businesses

In January, there were indications of betterment in business conditions for some of China’s smaller firms as the economy slowly recuperates from the adverse impacts of the Covid Zero pandemic.

The CKGSB Business Conditions Index, which evaluates sales, profits, the financing atmosphere, and inventory of private small companies in China, rose to 49.7 in January, up from 45.2 in December, as stated in a release by Cheung Kong Graduate School of Business.

This index is calculated using the same method as the PMI index, and a value greater than 50 represents growth, while a value less than 50 represents contraction from the previous month.

Out of the four main sub-indexes, three – corporate sales, profits, and financing – demonstrated improvement in January, while inventory decreased. The school acknowledged this as a positive outcome and wrote in the release, “The BCI is on the rise and is now pushing at the confidence threshold of 50.0, which is something to celebrate.”

The businesses that were surveyed also expected costs to rise in the next six months, while investments and recruitment opportunities were still not as high as in 2021, but remained in an expansive state.