China's small and medium-sized enterprises (SMEs) reported improved business performance in October, with an industry index measuring their activity posting its largest increase of the year.

The Small and Medium Enterprises Development Index, based on a survey of 3,000 SMEs across eight major industries, reached 89 last month – 0.3 points higher than in September, according to a report from the China Association of Small and Medium Enterprises.

This growth rate marked the largest increase this year and the highest since March 2023, the association reported.

Sub-indexes showed overall improvement last month. Boosted by supportive policies, the sub-index measuring SMEs' confidence in the macroeconomy rose to 98.8, up from 98.2 in the previous month.

The sub-index for industrial production continued its upward trend, while those for the construction, transportation, real estate, social services, accommodation and catering sectors reversed declines from the previous month and showed expansion.

The index includes multiple sub-indexes to gauge SME performance and expectations. A reading above 100 reflects an upward trend in business, while a reading below 100 indicates diminished vitality.