Beijing - China's small and medium-sized enterprises (SMEs) registered a further increase in their activities in the first quarter (Q1) of this year as the country's economy continues its robust recovery, industrial data showed Sunday.

A villager works on the production line of tea leaves at the workshop of a tea company in Nanzheng District of Hanzhong, northwest China's Shaanxi Province, April 5, 2023. (Xinhua/Shao Rui)

The Small and Medium Enterprises Development Index, based on a survey of 3,000 SMEs from eight major industries, came in at 89.3 in Q1, up from 88 in the fourth quarter (Q4) of 2022, the China Association of Small and Medium Enterprises said in a monthly report.

The figure, although still lower than the boom-and-bust line of 100, reversed the downward trend seen since the second quarter of 2021.

The sub-indexes for all eight major sectors rallied in Q1, with that of the accommodation and catering industry, the information transmission, computer service and software industry, and the transportation, postal and storage industry marking the more significant increases among all sectors tracked.

Thanks to the country's overall recovery momentum and expanding market demand, SMEs were more confident in business development, reflected in their improved market expectations, the association said, adding that their capital shortage had eased.

But the association still cautioned about the difficulties of rising labor and housing costs, calling for efforts to improve the business environment, and maintain the continuity, stability and transparency of government policies.