Purpose - From the advanced path of development and current situation, the development of enterprises plays a tremendous role in promoting national economic growth and raising the overall national strength. Therefore, this paper aims at examining the mutual effect between small & medium enterprises and economic growth. Research design, data, and methodology - In order to address the operating mutual effect between the small & medium enterprises and economic growth more clearly, this paper sets Alibaba Group and Hangzhou as an example. Meanwhile, the annual data from 2000 to 2017 will be employed, and an empirical analysis will be performed under the vector error correction model. Results - The findings display that the total revenue of Alibaba Group has a positive effect on economic growth in city of Hangzhou. However, the Granger Causality test implies that there is only a unidirectional causality between total revenue of Alibaba Group and economic growth in Hangzhou. More specifically, 1% increase in total revenue of Alibaba Group can result in 0.272% in economic growth of Hangzhou in the long run. Conclusions - In summary, for the long run, the local governments should promulgate a series of policies to assist the small & medium enterprises like Alibaba Group to improve the local economic growth as seen in the city of Hangzhou.

With the increasingly mature development of China's Internet technology, China's e-commerce has developed, which has given a huge boost to China's economic growth. In recent years, mobile payment has become a bright spot in China's economy, promoting the further development of e-commerce. On the one hand, various e-commerce sales and service platforms in China have greatly developed and with Alibaba as the representative, the annual turnover of e-commerce sales platform has increased year by year. On the other hand, with the implementation of the "one belt and one way" policy, cross-border electricity providers have promoted China's trade with the world and become China's new economic growth point. This paper analyzes the current situation of e-commerce in China and puts forward Suggestions for the further development of e-commerce in China.