China SMEI Slips to Nine-Month Low in June Amid Slowing Demand and Weak Exports

China's SMEI Hits 9-Month Low on Soft Demand, Export Weakness

China's Small and Medium Enterprises Index (SMEI) slid to 50.1 in June, the lowest reading since September 2024. The decline reflects a drop in new orders and continued weakness in external demand, particularly among export-driven SMEs.

Export Sector Faces Tariff Pressures

The export performance sub-index dropped below the 50 threshold, signaling contraction. Analysts attribute this to renewed global tariff tensions, which have dampened orders and business sentiment in the manufacturing sector.

Services Sector Still Under Strain

The non-manufacturing SMEs segment remained in contractionary territory for the third straight month, weighed down by domestic demand softness and structural headwinds in China’s consumer-facing sectors.

Slight Relief in Credit Conditions

Despite broader headwinds, SMEs reported marginal improvement in credit access as banks showed more willingness to lend, likely in response to policy nudges aimed at supporting small businesses.

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