No need for SMEs to panic over China

There has been a great deal of angst in the finance and business media over the impact China’s slowdown is having on stock markets around the world.

But actually, it could be argued that a reduction in their rate of growth is necessary as China’s economy reaches maturity. While the situation may suggest a slight slowdown in global growth and perhaps a further delay in raising interest rates there is little sign of worry about the prospects for the UK SMEs unless they sell to China.

Indeed the CBI this week revised its forecast for growth for the rest of the year from 2.5% to 2.6%.

For SMEs in particular, events on the wider global stage are unlikely to have much effect since most depend for their business on short term consumption.

Those that import from China may actually benefit from reduced cost as the price of Chinese products is likely to become cheaper.

Those SMEs that export luxury goods for China’s domestic retail market, however, may suffer a drop in orders as well as reduced margins due to currency devaluation.

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