Little fish big pond dating

27-Apr-2015 15:20

Virtually non-existent in 1979 when China took its first steps away from central-planning orthodoxy, its smaller companies numbered around 1m by 1990 and 8m by 2001. The smallest have just a handful of workers, and the largest of the medium-sized ones, according to the government's definitions, employ no more than 2,000 people.

Yet together they account for 60% of China's GDP and half its tax revenues.

Only after recovery will it be clear whether this reflects widespread devastation among small industrial firms, or simply a prudent tendency to slow production temporarily in the hope of surviving the crisis.

In the short term, however, smaller firms' fortunes are lagging.

An alarming set of official figures showed that the consumption of power by China's smallest industrial enterprises declined by half in the first half of this year.

Chinese exports began declining last November and the government reckons that poor export performance knocked 2.9 percentage points off the growth rate in the first half of this year.

The government also cites the decline in exports as an important factor in the loss of 20m jobs held by rural workers who had migrated to urban and industrial centres.

They are also responsible for 68% of China's exports, and it is this last figure that has made the current hard times especially difficult for them, as foreign demand has sagged.China has long sought to rebalance its export-driven economy toward a greater role in supplying domestic consumption, and if declining demand in America and other big export markets helps prod it along that path, that will represent a silver lining to the current gloom.