The South China Morning Post (December 30) disclosed that nearly 4.37 million of China’s smallest
businesses permanently shut their doors in the first 11 months of the year – more than three times the number
of new ones that opened during the same time. Only 1.32 million new micro and small firms opened in China
during the first 11 months of this year, compared with 6.13 million last year. It said data from public registry
tracking firm Tianyancha showed that, for the first time in two decades, the rate of deregistration among
micro and small businesses surpassed the number of those newly registered in China. Tianyancha’s data also
showed that the number of deregistered companies this year will also exceed that of last year – 4.45 million
– which was already a historical high at almost double the rate in 2019 and about 10 times that of 2018. Each
month this year, an average of 397,435 micro and small companies closed in China, surpassing the monthly
average of 370,782 last year, when the country was hit hard by the initial outbreaks of Covid-19 that led to
widespread lockdowns and the nation’s first quarterly GDP contraction since the end of the Cultural
Revolution in 1976.
(Comment: Beijing considers the nation’s more than 40 million micro and small firms the “backbone” of
China’s private sector, underpinning the national economy.)
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