Workers manufacture lighters in a lighter enterprise in Wangri Village, Shuangfeng County, Loudi City, Hunan Province. Photo: VCG

China's small and medium-sized enterprises (SMEs) maintained their recovery momentum in October amid strengthening policy support for the private economy and investment, data from an industry association showed on Monday.

The Small and Medium Enterprises Development Index, based on a survey of 3,000 SMEs from eight major industries, came in at 89 in October, up 0.3 points month-on-month, the highest growth rate since March 2023, the China Association of Small and Medium Enterprises said.

All of the eight sub-indices rallied last month, according to the association. For example, the sub-index for the macroeconomy stood at 98.8 in October, up 0.6 points compared with the previous month.

The index tracking sentiment about the macroeconomic situation reached 103.4, up 0.6 points from the previous month, while the industry situation sentiment index was 94.1, up 0.5 points from the previous month, indicating a notable elevation in market confidence and economic operations thanks to the implementation of a package of incremental policy measures, according to the association.

Ma Bin, executive vice president of the association, said that the index in October reflected that SMEs were on track to achieve a comprehensive recovery at the start of the fourth quarter, which will also create favorable conditions for the achievement of full-year economic and social development goals.

In China, more than 90 percent of private companies are SMEs, and more than 90 percent of SMEs are private companies, the Xinhua News Agency reported.
The private sector contributes about 50 percent of China's tax revenue, 60 percent of its GDP, 70 percent of its technological innovation and 80 percent of its urban employment.

In addition to the sound growth among SMEs, the purchasing managers' index (PMI) for China's manufacturing sector came in at 50.1 in October, up from 49.8 in September and surpassing the boom-or-bust line of 50 for the first time since May, according to the National Bureau of Statistics.

"Thanks to a package of incremental policy measures, various sectors including consumption and investment showed an improvement in October. The strong momentum is expected to strengthen in November and December this year, and even into 2025," Chen Fengying, an economist and former director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations, told the Global Times on Monday.

As part of a package of fiscal policy measures, Chinese lawmakers on Friday approved a State Council bill on raising the ceiling on local government debt by 6 trillion yuan ($838 billion) to replace existing hidden debts.

"The rollout and implementation of a package of policies - including local government debt swaps, stabilizing the real estate sector and injecting liquidity into the market - underscore the central government's resolve and capability to ensure stable economic growth," Chen said.