The move of workers and materials have also been greatly reduced due to COVID-19. This could be fatal for some small businesses.
Help, however, is on the way with nearly 600 policies rolled out in just 10 days...
There are more than 30 million SMEs in China, contributing over 60 percent of GDP and over 80 percent of employment.
BEIJING, Feb. 25 (Xinhua) -- The novel coronavirus epidemic affects not only people's health but also the economy. To stop the spread of the virus, most people choose not to go to malls and restaurants. The move of workers and materials have also been greatly reduced. The impact could be fatal for small and medium-sized enterprises (SMEs).
There are more than 30 million SMEs in China, contributing over 60 percent of GDP and over 80 percent of employment in the country.
As demanded by the central government, ministries and 27 provincial-level regions have announced nearly 600 policies to support SMEs in the ten days after the Spring Festival holiday.
Financing costs of SMEs have been reduced in response to tight cash flows in most regions, and the loan rate for SMEs has been cut by one percentage point in Hubei.
The banking industry, dominated by state-owned banks, has been required to not withdraw, cut or delay loans. Government and state-owned enterprises (SOEs) are required to pay for projects as soon as possible.
Twenty-three of the 27 regions are trying to cut rent. In 15 provincial-level regions, companies can get almost two months' rent off, if the property is owned by SOEs. In Hubei, the rent can be cut for a total of 6 months, and Tianjin for 4.5 months.
In Shanxi, Inner Mongolia, Chongqing, among other places, local governments offer subsidies to non-state-owned enterprise owners to urge them to cut rents.
Eighteen of the 27 regions have extended payment deadlines for electricity, water and gas bills, reduced the prices and provided non-stop supply. In some places, industrial water and gas prices have been cut by 10 percent for three months.
In China, industrial power is largely provided by SOEs. It's the Chinese government that bears the cost caused by lowering prices.
Nineteen of the 27 regions have proposed that enterprises could suspend the payment of social insurance. Shanghai has reduced about 1.45 billion U.S. dollars for enterprises by postponing the adjustment of social insurance fees.
China's political system works in its own way. The central government adjusts macro policies to counter the epidemic, and the ministries and provinces propose implementation plans in line with their own functions.
For example, the State Taxation Administration focuses its tax support on transportation, catering, hotel and tourism, four industries the hardest hit by the epidemic. Relevant enterprises can use the next 8 years to repay the losses incurred in 2020, which means getting tax relief.
In the ten days after the State Council's tax relief decision, the State Taxation Administration has issued a total of 12 policies on 6 taxes and 2 fees.
Provincial governments formulate policies in accordance with the central government's requirements. And each city issues more executable measures.
Without hesitation and bargaining, the about 600 policies will be soon implemented, aiding SMEs overcoming difficulties, protecting hundreds of millions of jobs.
As the engine of the world economy, China has made great efforts on epidemic prevention and control and the development of the economy and society. This is how China combats the coronavirus.■
Director: Shan Xu
Executive Directors: Guan Hongfei, Jiang Qianwen, Feng Chun, Zhang Xiaoxue, Wang Ting
Coordination: Yang Guang, Liu Pei
Production: Shang Junwei, Li Dongze, Jiang Yudong
Visual Design: Wang Jiadong, Guo Chao
Script Translators: Xia Kangjing, Helen Bentley
Liaowang Institute Data Media Lab;
Department of China News for Overseas Service
Xinhua News Agency