Policies to support SMEs in the context of COVID-19 welcome in China

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TIANJIN / CHANGSHA, Sept. 22 (Xinhua) – Yang Yafu, 35, finally caught his breath as packages of kimchi and salted vegetables were exported to Japan, and his foreign trade company has now found more channels national marketing.

“Thanks to measures such as interest rate cuts and tax cuts, our business has returned to normal. Total revenue reached 90 million yuan (approximately $ 13.9 million). last year, “said Yang, general manager of Tianjin Kentoku Foods Stock Co., Ltd.

As the COVID-19 pandemic wreaks havoc on the real economy, China has further succeeded in bailing out micro, small and medium-sized businesses and helping them through tough times.

Earlier this month, central authorities decided that China will step up aid and assistance to market entities, especially micro, small and medium-sized enterprises, and strengthen its political reserves, to ensure adjustments intercyclical.

“The new policy is in line with the needs of my business. The pressure from micro, small and medium enterprises in increasing production costs due to high raw material prices and epidemic impacts will be alleviated,” Yang said.

HEATING POLICIES

As part of the enhanced aid policy, the loan quota for small businesses will be increased by an additional 300 billion yuan this year. Local banks will be supported in providing loans to micro and small businesses and to self-employed workers.

Policies to reduce interest on loans and incentives for industries and businesses severely affected by COVID-19 will be fine-tuned. Banks will be encouraged to provide more inclusive credit-based loans to micro and small enterprises.

A risk compensation mechanism for the national financing guarantee fund will be put in place to help guarantee institutions provide guarantees to micro and small enterprises that lack collateral or credit records.

Feng Tianjian, general manager of Tianjin Xintai Technology Development Co., Ltd., said his company secured 1.5 million yuan in low-interest loans in 2020 to deal with short-term cash flow difficulties.

“With government support and strict control of the pandemic, I am confident that we will see rapid growth and that the company’s sales and employee salaries will double from the existing base,” Feng said.

“The new policy has improved capital support for several channels. It improves the availability of financial resources for micro, small and medium enterprises by establishing the risk compensation mechanism, ”said Liang Feng, associate professor of commerce at Nankai University.

REINFORCED MOVEMENTS

Chinese local governments have continuously implemented policies for micro, small and medium enterprises.

Zhangjiajie, a renowned tourist town in central China’s Hunan Province, has taken action to help wholesale and retail, accommodation and food services, logistics and transportation, and cultural tourism businesses by shutting down all of its tourist sites and increasing COVID-19 risk levels on July 30. after the city reported a confirmed case of locally transmitted COVID-19.

“More than 270,000 people are engaged in the tourism industry in Zhangjiajie. We lost a lot of business because all the tourist sites were closed, ”said Yang Aiping, president of a travel agency in Zhangjiajie.

According to the local government, many travel agencies, hotels and host families have received support funds. “The series of policies designed for us are truly heartwarming,” Yang said. “The local rural commercial bank also plans to extend a line of credit of 100 yuan per person to businesses depending on the number of tourists they have received, up to a maximum of 5 million yuan.”

In the new policy, financial institutions will be encouraged to set up bill discounts and standardized bill financing, and the People’s Bank of China will provide rediscount support to ease the pressure on micro, small businesses. and medium-sized enterprises caused by payment arrears.

“The financial support is a solid help for businesses in this tourist city. We are confident that tourism in Zhangjiajie will recover,” Yang said.

Bullish outlook

In the new policy, more support will be given to business start-ups and further innovation.

“We need this new support. As a new high tech company on energy efficiency, it has been difficult for us to get bank loans. But now we see the government’s determination to support start-ups. -up and help us improve risk resilience, ”said Liu Hao, president of Kangaroo (Tianjin) Carbon Neutral Research and Development Co., Ltd.

China announced earlier this month that it would create a stock exchange in Beijing and make it a major base for innovative small and medium enterprises.

“The Beijing Stock Exchange aims to serve innovative SMEs. The aim is to provide them with a more practical and inclusive financing and service platform and to cultivate a batch of key innovative SMEs. The new policy will provide better development avenues for SMEs after they emerge from the current difficulties, ”Liang said.

“Where there are enterprises, there are jobs. The new policy will reduce the burden on micro, small and medium-sized enterprises and improve employment opportunities,” said Li Jianming, vice president of the Confederation of Enterprises. from China.

“Meanwhile, companies should also make good use of the new policy, improve their management and expand markets to create more competitive products and services, and explore more growth potential,” Li said.

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