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Is the small claim procedure a retrial application at the original level or at the next higher level?
A retrial of a small lawsuit case shall apply to the people's court that originally tried it.

The Supreme People's Court's interpretation of the application of the Civil Procedure Law of People's Republic of China (PRC) Article 426th:

If a party applies to the people's court of first instance for retrial of a judgment or ruling in a small lawsuit on the grounds specified in Article 200 of the Civil Procedure Law, the people's court shall accept it. If the reasons for applying for retrial are established, a retrial shall be ruled and a collegial panel shall be formed for trial. The parties shall not appeal against the retrial judgment or ruling.

If a party applies to the people's court that originally tried for a retrial on the grounds that small claims are not suitable for trial, the people's court shall accept it. If the reasons are established, a retrial shall be ruled and a collegial panel shall be formed for trial. The parties may appeal against the retrial judgment or ruling made.

Extended data

After hearing the case, the people's court of second instance shall deal with it according to the following circumstances:

1. If the facts in the original judgment or ruling are clear and the applicable law is correct, the judgment or ruling will reject the appeal and maintain the original judgment or ruling;

2. If the original judgment or ruling is found to be wrong in fact or applicable law, it shall be changed, revoked or changed according to law;

3. If the basic facts are unclear in the original judgment, the original judgment shall be revoked and sent back to the people's court that originally tried the case for retrial, or the judgment shall be revised after finding out the facts;

4. If the parties are omitted from the original judgment or the legal procedures are seriously violated, the original judgment shall be revoked and sent back to the people's court that originally tried the case for retrial;

5. After the people's court of first instance has made a judgment on the case remanded for retrial, the people's court of second instance shall not remand it for retrial again if the parties appeal.

Baidu Encyclopedia: People's Republic of China (PRC) Civil Procedure Law

The Supreme People's Court, People's Republic of China (PRC): Interpretation of the Application of the Civil Procedure Law of People's Republic of China (PRC).