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The
Minxin Small and Medium Enterprise (SME) Index dropped to a
four-month low of 43.2 in June compared with the previous
month's reading of 45.8.
Small, private firms continue to suffer in relation to large
state firms, the survey showed, with smaller companies having a
significantly harder time getting bank loans and other types of
financing.
A slowdown in the private sector has policymakers worried about
longer term growth prospects, and state firms have stepped up
investment this year to make up for a decline in private sector
growth.
The Minxin SMI Index provides one of the earliest gauges of
China's economy each month, with a specific focus on smaller
firms. The data is compiled from a survey of 4,000 private
companies, 70 percent of which are small- and medium-sized
firms.
Some analysts say the index correlates with China's official
purchasing managers index (PMI) from the statistics bureau, due
July 1, though the Minxin data has shown wider swings and has
painted a gloomier picture of economic health.
The Minxin index is released by the government-affiliated China
Academy of New Supply-side Economics and China Minsheng Banking
Corporation.
As with the official PMI, readings above 50 indicate an
expansion on a monthly basis, while readings below signal
contraction.
The index was first published in November 2014, and has been
below 50 since December 2014. A similar Minxin SME index for the
non-manufacturing sector fell to a three-month low in June.
(Reporting by Elias Glenn; Editing by Jacqueline Wong)
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