Editor's note: Peking University's Guanghua School of Management released a survey report on China's small and micro-business operators at a recent seminar. The seminar brought together scholars, industry experts and practitioners to discuss the current state of small businesses, the pressures they face, the changes brought by artificial intelligence and digital tools, and the policies needed to support their growth. The following are excerpts from their remarks.

Supporting small enterprises through stable expectations

By Tian Xuan

Small and micro-businesses are the deepest foundation of China's economy and the broadest micro-level base of its growth.

Understanding their operating conditions, responding to their policy expectations and paying attention to their survival and development is not only an academic task, but also a responsibility of our time.

China's GDP grew by 5 percent in 2025 despite a complex external environment and insufficient domestic demand. This was no easy achievement. For 2026, setting the growth target as a flexible range reflects an effort to reduce the emphasis on a single numerical level and shift attention toward high-quality development.

It also leaves more room for structural adjustment, risk prevention and livelihood improvement.

The logic of expanding domestic demand is changing. It is moving away from direct policy stimulus and toward activating the market's own internal momentum.

The key is to stabilize employment so that people have money to spend, strengthen social security so that people dare to spend, and create new consumption scenarios so that people have places and reasons to spend.

To foster new growth drivers, China needs to upgrade traditional industries, develop strategic emerging industries, make early plans for future industries, and improve the quality of the service sector so as to extend both ends of the "smile curve".

For small, medium and micro-enterprises, two macro-level supports are especially important. The first is a sound legal environment.

China should strengthen the implementation of the Private Economy Promotion Law, advance legislation on a personal bankruptcy system, and give "honest but unfortunate" entrepreneurs a real chance to start again. Stronger intellectual property protection is also essential, as it can provide clear incentives for private and small businesses to innovate.

The second is a stable macro-policy orientation. Research shows that policy orientation itself does not have a significant impact on corporate innovation, but policy uncertainty can seriously discourage long-term investment. It is therefore crucial to maintain policy continuity, stability and consistency, so that the market can form steady expectations. This is vital for encouraging small and micro enterprises to invest, innovate and grow over the long term.

Tian Xuan is the dean of Guanghua School of Management, Peking University. The views don't necessarily reflect those of China Daily.