Millions of small businesses in mainland China closed last year despite the country reporting an annual GDP growth of 2.3%, according to media reports.

The accounts of as many as 3 million sole traders and sole proprietors across the country had been canceled from January to November last year, Chinese news site The Paper reported, citing information from company database Qichacha.

Jiangsu, Guangdong and Shandong were among the worst hit provinces, and the rate of closure in tourists’ hot spots and commercial areas was higher than in residential zones, according to the report.

Almost 70% of the closed business had operated for less than five years. In many major cities such as Tianjin, Chengdu and Guangzhou, businesses in the education, fitness and spa sectors were affected the most, the report said.

On the popular Yingkou Road in Tianjin, 17 shops out of 44 were out of business, The Paper reported. A local bar owner told the news site that “all shops on the street were struggling.”

Closure of these small businesses is expected to have a knock-on effect on the country’s employment rate. According to census data in 2019, a sole trader employed 2.37 workers on average.

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