Small Chinese Firms Going Under As Recovery Stumbles

China’s small businesses are cutting staff, struggling to pay off debt and nervous about the future.

Photo Insert: Recent disclosures from lenders and interviews with small-business owners show that many of these companies are suffering.

Their plight paints a grim picture of the country’s flagging recovery, Cao Li reported for Wall Street Journal.

The country’s small and medium-sized enterprises are crucial to the economy; they employed around 233 million people by the end of 2018, which was the last time this data was made public.

But official data, recent disclosures from lenders and interviews with small-business owners show that many of these companies are suffering.

“The biggest problem for small and micro enterprises now is survival,” said Ji Shaofeng, the founder of a microloan trade association based in China’s eastern Jiangsu province.

Consumer spending, factory orders and exports are among many indicators showing signs that the recovery is losing steam. China’s small-enterprise purchasing managers index (PMI) is now at 47.9; a reading below 50 shows business activity is slowing.

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