The development environment for China's small and medium-sized enterprises (SMEs) continued to improve in 2025, according to a report released by the China Center for Promotion of SME Development on Thursday.

The report, based on surveys of SMEs in 50 cities across the country, assessed five major criteria by looking into the market environment, legal environment, financing environment, innovation environment and policy environment, respectively.

The results showed that there has been an improvement in SMEs' development environment, with narrowed gaps between cities, fewer barriers in market access, and more balanced regional development.

"According to the survey, the overall satisfaction of SMEs with the development environment steadily increased from 74.60 points in 2020 to 84.54 points in 2025. Policy packages have been taking effect in stabilizing employment, enterprises, markets and expectations. Their effectiveness on SME development environment continues to emerge," said Lai Xiao, deputy director of the China Center for Promotion of SME Development's policy research division.

Also in the survey, more than 70 percent of the SMEs that use special and sophisticated technologies to produce novel and unique products maintained a stable or growing operating revenue, with over 60 percent of them planning to carry out innovation and research and development in the coming year, and more than 40 percent having investment plans.

"The survey showed that 77.28 percent of enterprises rely on independent research and development as their primary mode of innovation, fully unleashing innovation momentum. Nowadays, China's SMEs are continuously increasing investment in science and technology innovation, with a gradient cultivation system for SMEs that use special and sophisticated technologies to produce novel and unique products steadily improving," Lai said.