SMEs still suffering amidst recovery
China's economy may be climbing out of its recent rut, but try telling that to the owners of the country's small and medium-sized enterprises (SMEs), many of whom are struggling just to keep their doors open.
For one thing, the rapid-fire approval pace on infrastructure projects launched by the National Development and Reform Commission, China's top economic planner, has soaked up much of the banking industry's funding, leaving little credit available for the country's SMEs.
Of course, the People's Bank of China has been working hard to keep the financial system stocked with cash, but most of the liquidity the central bank has funneled into the market recently through its normal open market operations has gone to large State-owned enterprises.
What's worse, as China's large corporations and government-backed firms continue to perform well thanks to favorable policy support, SMEs are finding it hard to compete with their larger peers when it comes to attracting talent.
The author is Li Wei, an economics professor from Cheung Kong Graduate School of Business.
Of course, the People's Bank of China has been working hard to keep the financial system stocked with cash, but most of the liquidity the central bank has funneled into the market recently through its normal open market operations has gone to large State-owned enterprises.
What's worse, as China's large corporations and government-backed firms continue to perform well thanks to favorable policy support, SMEs are finding it hard to compete with their larger peers when it comes to attracting talent.
The author is Li Wei, an economics professor from Cheung Kong Graduate School of Business.
