Guangzhou, capital of the prosperous southern province of Guangdong, recently implemented a host of policy measures aimed at boosting business entities as the world emerges from the COVID-19 pandemic. While these policies are welcome news for small businesses in the area, they are also emblematic of China's broader efforts to support small businesses and promote economic growth this year.

China's efforts to support its micro, small and medium-sized enterprises (MSMEs) are critical to economic growth. Private MSMEs are estimated to contribute 50 percent of taxes, 60 percent of the GDP, 70 percent of technological innovation, and 80 percent of employment, and account for 90 percent of all companies in the country. It's clear that MSMEs are a vital part of China's economic ecosystem and supporting them is essential to promoting long-term growth and stability.

As someone who runs a boutique creative agency in Guangzhou, I have been closely following the implementation of these measures and have experienced their impact firsthand. In the wake of the pandemic, many small businesses were struggling to keep their doors open, but the city's tax exemptions, support for MSMEs, and subsidies for newly opened international and domestic cargo routes have provided much-needed relief. As a result, we've been able to reinvest in our operations, which has helped us better serve our clients. What's more, we've noticed a growing willingness among clients to invest in creative services, a clear sign the business climate in Guangzhou and across China is improving.

The signs of China's economic recovery are more than just anecdotal. The National Bureau of Statistics reported that the country's manufacturing sector recorded a purchasing managers' index of 50.1 in January, indicating a return to expansion territory, with the new orders sub-index also rising by 7 percentage points to 50.9 percent. Behind these figures are millions of small firms all over China beginning to see more business and benefiting from supportive policy measures.

The country's dedication to fostering a favorable business climate is evident in the policies implemented by Guangzhou and other cities. This dedication is beginning to pay off, with foreign business leaders expressing increased confidence in the Chinese economy and market in 2023 compared to the previous year. China's economy is expected to grow by 5.2 percent in 2023, according to the International Monetary Fund. Investment banks like Morgan Stanley and Goldman Sachs have also raised their growth forecasts for China, with J.P. Morgan stating in a research note, "We believe 5 percent will remain this year's growth target, though, in practice, 5 percent is perhaps now being interpreted as a minimum."

Despite the high level of business confidence in China, the country is not immune to global economic headwinds arising from a combination of factors, including a slowdown in worldwide economic growth, rising trade tensions and political uncertainty. This has put a strain on China's economic prospects. Nevertheless, China has weathered the storm better than most countries, and foreign companies are continuing to invest in the country. In January, paid-in foreign direct investment rose by 14.5 percent year on year to 127.69 billion yuan ($18.5 billion), a testament to the resilience and attractiveness of the Chinese economy.

It is also encouraging to see the latest China consumer survey by UBS Group AG, a major Swiss bank, showing a notable increase in dining out, in-store shopping and offline entertainment. This uptick in consumer confidence bodes well for the country's economic recovery and has already positively impacted small businesses. The more confident consumers feel about spending money, the more likely they are to invest in creative services like ours, which is crucial for the growth and expansion of our business.

As we look to the future, it's clear that policies like those implemented by Guangzhou are crucial to the economic prospects of small businesses across China. They not only signal the government's commitment to supporting small businesses but also demonstrate a dedication to promoting economic growth and fostering a favorable business climate. These policies will continue to encouragingly impact the global economy and the future of business in China.

This article was first published on China.org.cn. The author is a freelance columnist based in Guangzhou, capital of Guangdong Province 

Copyedited by Elsbeth van Paridon 

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