SMEs through Tough Times of the Covid-19 Pandemic in China

Abstract

Since its outbreak in late 2019, the coronavirus has disturbed the working and living of both people and businesses, and the continuing emergence of Covid-19 variations have made it hard to fully restore the activity of both society and the economy to pre-pandemic levels. In China the pandemic affected small and medium-sized enterprises (SMEs) more severely than large companies. The objective of this paper is to analyse the effects of the pandemic on SMEs in comparison with large firms based on their financial reports. This document integrates the consolidated statements of companies based in Beijing and sums them according to quarters by collecting the income statements of listed companies. Research results show that SMEs are more fragile to shocks, especially in terms of administrative costs and expenses as well as income taxes. The benefits of Chinese government policy measures concern mainly technology-based micro and small enterprises. As the forecast presented in this paper shows, the operating situation of SMEs is assumed to recover in 2023.