Could SMEs become the weak link in China’s economy?
![Could SMEs become the weak link in China’s economy? Could SMEs become the weak link in China’s economy?](/var/cofaweb/storage/images/tur-tr/haberler-yayinlar/yayinlar/could-smes-become-the-weak-link-in-china-s-economy/2787735-1-tur-TR/Could-SMEs-become-the-weak-link-in-China-s-economy_image280x141.png)
When considering risk in the Chinese economy, a lot of the discussion has focused on large State-Owned Enterprises (SOEs), or large private conglomerates. However, headwinds impacting an understated group of smaller firms have the potential to be much more disruptive: Small and Medium Enterprises (SMEs) account for the majority of enterprises and a sizeable proportion of employment. However, the need to address financial stability risks associated with China’s vast corporate indebtedness – most of which has historically been associated with SOEs – has left SMEs scrambling to access financial resources to meet their working capital and long-term expansion needs.