This episode covers a survey on the performance of small and medium-sized enterprises (SMEs) in January, with comments from Liam Jia, team lead at the EU SME Centre; the phasing out of restrictions on travellers from China to European Union Member States; and foreign direct investment in January. Join the event on 28th February on the protection of women’s rights in the workplace.
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January SME Development Index
Swedish Presidency’s statement on the coordination of COVID-19 travel measures
International flights’ resumption
Official January FDI data (in Chinese)
European Chamber webinar: New PRC Law on the Protection of Rights and Interest of Women – Implications for Employers
RUI: Hello and welcome to China Shortcuts,
MARIANN: The SME Development Index, released by the China Association of Small and Medium Enterprises on 15th February, indicated that SMEs’ performance recovered to the highest level since last February. This finding spells the end of a half-year-long decline. However, while the data showed a steep recovery from December, it still stayed well below the 100-point critical value of prosperity.
RUI: Commenting on the data is Liam Ziqi Jia, team lead at the EU SME Centre in Beijing.
Liam Jia: 2023 is a year of great expectations for China. Having abandoned its zero-Covid policy and international isolation, there’s hope for an economic rebound that could stave off a global recession and optimism that better relations with the EU might bring greater stability to the international system. However, the economy is likely to recover, but a one-time consumer spending rebound will not solve the long-term structural difficulties China’s economy faces.
The SME Development Index indicated that SMEs’ performance recovered to the highest level recorded since last February. With SMEs in the transport and storage sector, accommodation and catering sector logging the biggest improvement. This finding also meant the end of a half-year long decline.
Difficulties in business operations and structural upgrading for SMEs remain the challenges for resilience, calling for further improvements on the business environment and incentives for SMEs across the country to further support SMEs to shore up growth.
With the two sessions around the corner, the annual meetings by the government to discuss key political and economic issues and take central level decisions, which is of particular interest to the international business community as it will set China’s political and economic precedent for the rest of the year. we have reasons to expect clearer signals for economic recovery and policy incentives for boosting growth for SMEs.
RUI: According to a statement released on 16th February by the Swedish Presidency of the Council of the European Union, member states have agreed to phase out COVID-related restrictions on travellers from China by mid-March.
MARIANN: EU countries will gradually remove the requirement for negative pre-departure COVID-tests by the end of February and the random testing of travellers from China will be phased out by the middle of March. These measures were put in place in January, as China’s sudden resumption of outbound travel amidst large-scale outbreaks across the country prompted fears about the appearance of a new variant.
RUI: China is yet to withdraw its testing requirements for overseas travellers. At the same time, some improvements can be seen in the optimisation of international travel.
MARIANN: According to the Civil Aviation Administration of China, by the second week of February, China resumed regular passenger flights with 58 countries. This accounts for 64 per cent of the countries that handled flights to and from China in the same period in 2019.
RUI: China saw a significant rise in actual use of foreign direct investment in January compared to the same period last year, with an increase of FDI into high-tech industries in particular.
MARIANN: According to official data released by the Ministry of Commerce on 20th February, the actual use of FDI grew 14.5 per cent overall in yuan-denominated terms. At the same time, foreign investment in high-tech industries expanded by more than 60 per cent year-on-year. It is important to note, however, that the official data qualifies investment according to the place where a business is registered. This means that investments to China from Hong Kong or tax havens, like the Cayman Islands, are counted as FDI, even if the money comes from subsidiaries of Chinese companies – a phenomenon known as round-tripping investment. This makes it difficult to assess how much FDI trends reflect actual foreign investor sentiment towards the Chinese market.
RUI: On 1st January 2023, the newly-revised Law on the Protection of Rights and Interests of Women came into force, improving the protection of women’s rights and interests in China in a wide range of areas. The revised law stipulates that the state should take necessary measures to promote gender equality and eliminate all forms of discrimination against women.
MARIANN: The new set of rules put an emphasis on women’s employment security as well, setting out the aim of creating an impartial employment and business environment.
RUI: Join our webinar on 28th February to learn more about the protection of women’s rights in the workplace and the new law’s implications for employers.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.