Despite an optimistic overall business performance, small and medium-sized enterprises (SMEs) in China are still suffering from financing difficulties, according to a recent report by the China SME Association.

The report said the nation's general SME development index was 106.7 in the second quarter of this year, dropping 0.4 percentage points from the first quarter, a downturn after rise in three consecutive quarters.

The report was made after the association surveyed SMEs in industries ranging from construction, manufacturing, real estate, information, finance, trade and food services to transportation and logistics.

Indices read from zero to 200, with marks above 100 indicating good performance and below 100 indicating poor performance.

According to the report, all the industries surveyed posted development indices of over 100 in the second quarter.

But the index on their access to financing dropped below the benchmark 100 to 97.4 in the second quarter.

"This indicates SMEs are still facing funding problems despite all the efforts made by the State to improve their access," the report noted.

The composite index also fell below 100 to 99.2, though rising slightly from the first quarter.

"It means SMEs held a slightly negative outlook on their business operations," said the report.

China had more than 4.3 million registered SMEs in 2009 that comprise 99 percent of the nation's registered businesses, statistics from the association indicate.

SMEs contribute about 60 percent to the nation's GDP, half of its tax payments, about 70 percent of its exports and create about 80 percent of new jobs.

(China Daily September 16, 2010)