Last updated: August 13, 2026
In China, there are more than 60 million SMEs. These SMEs are essential in China, providing huge amounts of employment opportunities and representing one of the most important sources of jobs in China, accounting for more than 80% of urban employment. According to China’s Ministry of Industry and Information Technology, SMEs also contribute more than 60% of GDP and more than 70% of technological innovation.
SMEs in China have had to cope with the difficulties resulting from the covid-19 measures, which have affected business, recruitment and, more specifically, the executive search field. This is all due to political and economic insecurities caused by Covid- 0 policies.
SMEs in China After Covid-19: Impact on Executive Search
Key Figures at a Glance
| Data point | Finding | Source |
|---|---|---|
| SMEs operating across China | More than 60 million | Ministry of Industry and Information Technology |
| Specialised and innovative SMEs maintaining or increasing revenue, 2025 | 73.37% | China Centre for Promotion of SME Development / MIIT |
| Specialised and innovative SMEs planning innovation and R&D | 63.56% | China Centre for Promotion of SME Development / MIIT |
| Surveyed SMEs reporting digital transformation activity | 47.45% | China Centre for Promotion of SME Development / MIIT |
Added to the fact that the talent pool in China is shrinking and the foreign talent leaving the country, have made it hard for companies in China to find and retain talent, increasing the demand for executive search partners.
So, because SMEs contribute more than 80% of urban employment in China, it has become vital for establishing the country’s economy to ensure SMEs´ employment at all levels. To address this situation, the Chinese government established measures that include training subsidies and social insurance premiums that can be paid on a deferred basis and has cut taxes and fees.
These measures have already provided 34.7 billion yuan ($5.17 billion) to help SMEs in China in the first quarter of 2022, supporting the employment situation with 1.57 billion for training subsides and 22.78 million vocational training vouchers across China.
The effect on executive search in China business
On the executive search side and in order to increase the availability of executive talent, the government has given access to capital and loan facilities to foreign companies new in China, through alternative sources of SME financing. Also, a five-year plan for increasing professionalism and improving innovation capacity has been proposed by the Ministry of Industry and Information Technology (MIIT).
These measures will help reduce SME operating costs and increase employment stability. The measures are expected to help restore market expectations and increase market confidence which, combined with telecommuting facilities and other work flexibilities, can help make China’s SMEs more attractive to local and foreign executives.
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Frequently Asked Questions: SMEs and Executive Search in China
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