The research investigates how small and medium-sized businesses in China can perform better by focusing on the abilities of their managers. By looking at networking, sensing, and innovation skills of these managers, the study explored how these capabilities impact company performance. They found that Chinese SME managers are good at using these skills to run their businesses effectively. The study showed that having strong networking, sensing, and innovation capabilities can lead to better performance for SMEs. The ability to sense changes in the market was especially important for success. Improving these managerial skills can help small and medium-sized businesses in China do well and make a positive impact on the economy. This research adds to what we know about how companies can adapt and succeed in a competitive market.