Saudi Press

Saudi Arabia and the world
Thursday, Oct 02, 2025

The focus must be on SMEs as economic growth slow further

The focus must be on SMEs as economic growth slow further

The private sector contributes the lion’s share of China’s GDP and new jobs therefore banks need to undertake a calculated chance on small and medium-sized enterprises.

China’s economy grew by only 6.0 per cent in the third quarter as Beijing struggles to contain the effects of the trade war with the United States amid a wider slowdown.


It is the lowest quarterly growth since records began in 1992, adding weight to a gloomy forecast from the International Monetary Fund of a drop in global growth this year from 3.8 to 3 per cent. China’s growth was less than the 6.1 per cent consensus forecasts by some economists and has now slipped to the bottom end of the range of 6.0-6.5 per cent set by the government for 2019. The IMF’s twice-yearly World Economic Outlook predicts China’s economy will grow by 6.1 per cent this year, before slipping beneath 6.0 per cent to 5.8 per cent next year. It is a reminder, as US growth is tipped to slow from 2.4 per cent this year to 2.1 per cent next year, that there are no winners in trade wars.

The costs of the present one are beginning to be felt painfully around the globe. They are reflected in gloomy growth figures, even worse forecasts and measures to boost liquidity, lending and investment, including China’s recent US$126 billion release of banks’ reserve funds, and the Hong Kong Monetary Authority’s release of HK$300 billion in reserves. The fund revises Hong Kong’s GDP growth forecast for this year, amid civil unrest, from 3.0 last year to .03 per cent. Given that China has driven global growth before and after the global financial crisis, it is understandable that IMF chief economist Gita Gopinath sees an “urgent need” to de-escalate trade and geopolitical tensions.

Against this background, it is also little wonder that Premier Li Keqiang has signalled Beijing’s concerns in remarks to five provincial governors that local officials must make growth a priority. The premier’s address to the governors of Shaanxi, Jiangsu, Henan, Hubei and Guangdong was the first time the government had suggested that its full-year economic targets were at risk of being missed. That said, the latest official data is mixed, showing that China’s industrial economy performed better than expected last month, while exports fell by 3.5 per cent and imports 8.5 per cent, reflecting the trade war. Industrial production, a measure of output in sectors such as manufacturing and mining, grew by 5.8 per cent, an improvement on August’s figure of 4.4 per cent, a 17-year low.

The authorities need to keep a close eye on lending to business to ensure value from the latest injection of liquidity. Small and medium-sized private enterprises without a government guarantee face difficulties obtaining credit from major banks amid a crackdown on risky lending and tighter regulation of shadow banking. But the private sector contributes the lion’s share of China’s GDP and new jobs. Unless banks are prepared to undertake a calculated chance on them, SMEs cannot achieve their full potential for driving economic growth.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×