Support Measures for SMEs Affected by New Coronavirus Emerge Across Various Regions in China

[Asia Economy Beijing=Special Correspondent Park Sunmi] As the spread of the novel coronavirus infection inevitably causes economic damage, various support measures for small and medium-sized enterprises (SMEs) at the local government level are being announced one after another.

According to the Chinese government announcement on the 6th, Beijing City has decided to reduce various administrative costs such as sewage treatment fees, road occupancy taxes, and facility inspection fees for SMEs and small merchants affected during the spread of the novel coronavirus. In addition, SMEs and small merchants residing in buildings owned by state-owned enterprises can receive a 50% discount on February rent. It was also announced that rent reductions for tenants will be encouraged in the private sector.

SMEs and small merchants facing management difficulties due to the epidemic can postpone tax payments for up to three months according to the law, and venture companies located in Zhongguancun can receive research subsidies not exceeding 200,000 yuan based on their research and development status. Companies engaged in tourism, accommodation, and dining industries will also have their social insurance payment deadlines extended.

During the spread of the novel coronavirus, if SMEs are unable to repay bank loans at maturity, extensions of the maturity period will be possible, and loan interest rates will be reduced.

The first local government to announce support measures for SMEs in response to the novel coronavirus was Suzhou in Jiangsu Province. On the 2nd, Suzhou announced 10 support measures for SMEs, which include support in various areas such as employment, tax reductions, loan support, and rent reductions. In addition to Suzhou and Beijing, similar support measures for SMEs have been prepared in Shanghai and Qingdao, where many SMEs are located.

Concerns have grown that due to the spread of the novel coronavirus, Chinese companies will be hit hard, and the scale of debt defaults is expected to soar to a record high again this year.

Bloomberg reported that even after the Spring Festival (Chinese New Year) holiday, the spread of the novel coronavirus has made it impossible for companies, factories, and stores to operate normally, making it difficult for companies to repay their debts. The scale of defaults in China reached 137.6 billion yuan last year, marking a record high for two consecutive years, and at the current pace, it is highly likely to break the record again this year. Moreover, the total amount of corporate bonds maturing in the first quarter of this year is 1.7 trillion yuan, which is more than the 1.6 trillion yuan during the same period last year.

This content was produced with the assistance of AI translation services.