China SME Sentiment Hits Record-Low

The video discusses the potential downturn in China's economic growth due to the coronavirus, as indicated by the SME Confidence Index. The index, a predictor of the PMI, shows a significant drop, reflecting disruptions in production and services. The government is expected to implement countercyclical policies, including fiscal measures and infrastructure investments, to support SMEs, which are crucial for employment and revenue. Monetary policies may also be adjusted to ensure liquidity and credit growth, aiming for economic recovery if the virus is controlled.

What does the SME Confidence Index indicate about China's economic growth in the first quarter?

• A slight improvement in economic growth

• Stability in economic growth

• A sharp downturn in economic growth

• A significant increase in economic growth

What percentage of total employment in China is attributed to SMEs?

• 80%

• 50%

• 60%

• 70%

What is one of the government's strategies to support SMEs during the economic downturn?

• Reducing export subsidies

• Providing credit at preferential interest rates

• Increasing import tariffs

• Raising corporate taxes

What fiscal policy measure is China expected to implement to counteract the economic downturn?

• Increase in social contribution rates

• Decrease in medical equipment investment

• Proactive fiscal policy with tax cuts

• Reduction in infrastructure investment

What is the Central Bank's objective regarding credit and liquidity in the economy?

• To ensure credit grows faster than nominal GDP

• To maintain liquidity at a low level

• To reduce credit availability

• To increase interest rates