Whether the tightening macro-economic policy, deteriorating world economy as a result of soaring oil prices, and rising Renminbi value are causing further alarm to China’s budding SMEs business is a big concern to many who made investment in Alibaba business line.

Top state leaders are facing a delicate balancing act

Bank of Communications HongKong Branch published articles periodically to evaluate the economic situation. The last updated research concluded that inflation rate tied to Renminbi value in such a way that they were reacting to each other to the same direction – “you go up,  I go up; you go down, I go down”. 

China government would curb inflation rate by raising Renminbi value, which unfortunately would hamper the export growth.

Meanwhile, the latest report from HSBC noted that the Asia-Pacific Small and medium enterprises (SMEs) remained bullish about the their trade prospects and maintained that they would continue their investment in human resources.

China Exporters are looking for a better tomorrow

The HSBC Asia Pacific region SMEs confidence survey “汇丰亚太地区中小企业信心调查”, was conducted in the second quarter of this year,  has selected 3,000-plus SMEs in the Asia Pacific region, which covers 10 countries and regions. Of those 3,000 SMEs, about 300 respondents -representing 10% of investigation was done in the Yangtze River Delta, the Pearl River Delta and Bohai region.

HSBC Asia Pacific region SMEs confidence survey “汇丰亚太地区��小企业信心调查”
HSBC Asia Pacific region SMEs confidence survey

58% of the surveyed enterprises in China believed that economic growth would remain steady, same as last year; 28% of the enterprises has higher hope that they would have a better result this year, only 13% of SMEs said they would experience a slower growth.

So what’s the conclusion of these 2 pieces of information?  We would suggest:

  • China government is giving away export growth to get inflation under control. Should inflation be out of hand, there will be social unrest in the country.  Nobody wants to see it happen anyway. As soon as inflation rate is going down, export growth will stage a comeback
  • SMEs in China would anticipate a better growth as soon as cross-border trading from India and other Asia regions continue to prosper. The following figures exacted from the HSBC report can help understand the current situation
  1.      34% of the respondents expected trade turnover increase with their trading partners in Asia,
  2.      56% expected steady growth
  3.      11% expected a reduced trade pattern

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