On April 8, 2020, 76 days after the closure of the city, Wuhan fully resumed production and resumed production. In a relatively short period of time, the resumption rate and the resumption rate were close to 100%. Many key projects and major projects were completed and started. It can be said that economic recovery Great achievements have been made in the work.
However, the resumption of production in the private economy, small and medium-sized enterprises, and self-employed individuals is far less smooth than that of state-owned enterprises and large enterprises. Most private enterprises are facing a decline in orders and shrinking revenues. Not strong. Since the off-season is coming soon, if the operation situation cannot be reversed, many private enterprises may enter a state of substantial failure from the state of waiting and watching. The collapse of a large-scale private economy will be like opening the Pandora’s box, and it may have a serious impact on Wuhan’s economy through at least the following four paths:
A large number of private enterprises and individual economic failures-unemployment-decline in demand-induce more bankruptcies
A large number of private enterprises and individual economic failures—broken industrial chains—movement of industrial chains—cities have lost long-term momentum for economic growth
A large number of private enterprises and individual economic failures-deterioration of economic ecology-decline in private investment, capital withdrawal
A large number of private enterprises and individual economic failures-population outflow-decline in human capital, innovation-prices of capital goods such as real estate-deterioration of corporate balance sheets-financial risks
The central government first proposed the "six guarantees" on April 17th. The "four guarantees" in the "six guarantees" are all related to the preservation of enterprises. Due to the advantages of the state-owned economy and large enterprises, in fact, the most important thing for protecting enterprises is to preserve Private economy and SMEs. So, what is the current situation of Wuhan's private economy after the unblocking? The China New Private Economy Research Center of Wuhan University and the Wuhan Federation of Industry and Commerce carried out the "Financial Support Policy Survey of Enterprise Resumption and Production Resumption" on April 25-30, 2020, collecting 413 enterprise questionnaires, and the research team also obtained 334 Wuhan enterprise questionnaires collected by the All-China Federation of Industry and Commerce on May 25, 2020. Based on these two questionnaires, the research group will analyze the current status of Wuhan's private economy.
1. Distribution of sample of surveyed enterprises
A total of 413 valid questionnaires were collected in this round of research, including 9 state-owned enterprises (accounting for 2.18%), 400 private enterprises (accounting for 96.85%), and 4 foreign-invested enterprises (accounting for 0.97). Distribution business scale as Figure 1 , the company's industry distribution as in Table 1 . It can be said that the data collection of the questionnaire survey is more representative, and it is also in line with the development status of Wuhan.
Figure 1: Size distribution of sample companies
Table 1: Industry distribution of sample companies
All 334 questionnaires collected by the All-China Federation of Industry and Commerce came from private enterprises, including 13 large enterprises, 53 small and medium enterprises, 165 small enterprises, and 103 micro enterprises. Of these companies, 14 are in the primary industry, 121 are in the secondary industry, 151 are in the tertiary industry, and 48 are diversified.
2. The status of resumption of production and operation
1. Insufficient production capacity recovery
Although all the enterprises in this round of survey have resumed production and production, 66.10% of the enterprises have less than 50% production capacity, and only 15.01% of the enterprises have recovered their production capacity to more than 80%. The industries with higher reproductive rates are agriculture, forestry, animal husbandry and fishery, food and beverage manufacturing, traditional manufacturing, machinery and equipment electrical manufacturing, transportation, and financial industries. More than half of these industries have more than 50% reproductive rates . The lowest reproductive rates are traditional education, catering, entertainment, tourism and accommodation, traditional cultural and cultural industries, and construction. Among the four industries, the proportion of enterprises with a reproductive rate of less than 30% is 90.91%, 65.63%, 57.14% and 47.62% (see FIG. 2 ).
Figure 2: Enterprise capacity recovery
Compared with the results of the end of April in Wuhan survey of the research group, the National Federation of the resumption of production rate increased slightly (see the end of May Findings Figure 3 ), the resumption of production at the rate of more than 80% of the company increased to 21.56%, but The proportion of enterprises with a recovery rate of less than 20% still accounts for about one third (31.74%).
Figure 3: Enterprise capacity recovery situation (National Federation of Industry and Commerce survey)
2. Corporate orders have shrunk severely
The main reason for the low recovery rate of enterprises is the decline in orders (69.98%), the difficulty of carrying out business outside Wuhan (40.19%) due to the epidemic, and the non-recovery of the supporting enterprise's production capacity (36.08%). 50.12% of enterprises report that orders only last a month, 28.09 percent of the company can maintain 1-3 months, the company more than six months can be maintained only 10.17 percent (see Figure 4 ). The contraction of orders is more prominent among enterprises below the scale. Among the enterprises with operating income of less than 20 million, 58.33% of the orders of enterprises can only be maintained for one month, but the proportion of enterprises with a scale of more than 100 million yuan has dropped to 39.13%.
Figure 4: The length of time an enterprise's order can be maintained
The All-China Federation of Industry and Commerce also surveyed the orders of enterprises . Figure 5 shows that compared with the same period in 2019, orders increased by only 14 (4.19%) companies, the same was 51 (15.27%), and 231 ( 69.16%) the orders of enterprises fell, of which 123 (36.83%) enterprises' orders fell by more than 30%, and 38 enterprises did not choose (37 of which were not started).
Figure 5: Enterprise orders compared with the same period (National Federation of Industry and Commerce data)
3. Corporate revenue is expected to decline sharply in 2020
32.2% of firms expect 2020 full-year revenue fell 32.2%, 34.38% of the company revenue is expected to decline more than 50%, only 19.61% of the company revenue is expected to decline less than 30% (see Figure 6 ). Of the 413 companies, 71 companies are involved in export business. 46.48% of companies expect annual exports to fall by more than 50%, 9.86% of companies are expected to decline by 30%-50%, and only 22.54% of companies expect exports to fall by less than 10% .
Figure 6: Companies expect revenue decline to account for 2019 revenue share
Enterprises are also not optimistic about the prospects. 25.67% of companies believe that it will take more than 1 year to recover to last year's level of operation, 45.28% of companies believe that the recovery time will take half a year to 1 year, and only 9.2% of companies believe that within 3 months Can return to normal.
4. The main difficulties facing the company
Enterprises are facing the greatest difficulty is funding constraints, shrinking orders and labor cost pressure (see Table 2 ). And whether it is a large-scale enterprise or a small-scale enterprise, capital shortage is the biggest difficulty facing the enterprise, followed by the contraction of the order, and again the pressure of labor cost is too great.
Table 2: Main difficulties faced by enterprises (multiple choice)
National Federation survey of May 25, then asked about the main source of cost pressures (see Table 3 ), the results showed that more than 70% of companies believe that greater labor costs, nearly 40% of enterprises believe The rent pressure is great, and the increase in raw material prices and financing costs have also brought great pressure to many companies.
Table 3: Main sources of cost pressures for enterprises (multiple choices, National Federation of Industry and Commerce data)
3. Unemployment problems caused by private enterprises' operating difficulties may be gradually exposed
At present, private enterprises are facing serious problems of insufficient production capacity and insufficient orders. Many companies with low recovery rates require some employees to stay at home, pay basic living expenses or stay without pay in order to save labor costs. The recovery rate of enterprises is not high, but it is still in the wait-and-see period, and a large number of layoffs have not yet begun. However, the off-season sales of various enterprises will soon enter. If the order situation in June is not reversed, these companies with a sharp decline in revenue will no longer wait and see and start to lay off employees. The unemployment problem may begin to be exposed in June.
Can also be found in the research report, 413 companies have 42.37% of companies plan to cut jobs (see Figure 7 ), but this value is not much difference between companies of different sizes. 45.42% of companies with revenues of less than 20 million are planning to lay off employees, 43.66% of companies with revenues of between 20 million and 100 million are planning to lay off employees, and 36.24% of companies with revenues of more than 100 million will lay off employees. However, the layoffs of small-scale enterprises are still much greater than those of enterprises above the designated size. For example, among companies with revenues of less than 20 million, 20 million to 100 million, and more than 100 million, the proportion of companies with layoffs of more than 20% is 19.99%, 5.77%, and 11.59%, respectively.
Figure 7: Estimated layoffs of private enterprises in 2020
In addition to layoffs, 43.58% of companies expect a salary reduction in 2020, of which 10.9% of companies will receive a salary reduction of less than 10%, 15.01% of companies will expect a salary reduction of 10%-20%, and 9.93% of companies will expect a salary reduction. Salaries range from 20% to 40%, and 7.75% of companies have reduced salaries by more than 40%.
The questionnaire survey of the All-China Federation of Industry and Commerce also asked about the company's layoff plan. Although only 56 companies (16.77%) said they would lay off employees, but because the questionnaire is a real-name system, companies may understate this data. And more than 70% of the enterprises surveyed by the All-China Federation of Industry and Commerce believe that labor costs are the main source of current cost pressures. Therefore, it can be reasonably concluded that many companies are likely to alleviate the cost pressures of enterprises through layoffs in the event of a sharp decline in revenue.
Private enterprises and the individual economy have absorbed most of the labor force in the society. Once the area of layoffs is large and the salary reduction is large, the tasks of “guaranteeing employment” and “securing people’s livelihood” in the “six guarantees” target this year will face greater challenge.
4. Status of corporate financing and implementation of financial preferential policies
1. Large private enterprise financing needs
As shown in Table 2 above, 80.39% of the mission enterprises' most serious difficulty is the shortage of funds. After subdividing the scale of the enterprise, it can be found that 82.56% of the enterprises with revenue below 100 million believe that the tightness of funds is the biggest difficulty faced by the enterprise. The proportion of enterprises with revenue of 100 million to 1 billion is 72.4%. The proportion of companies with revenues of more than 1 billion is also as high as 54.55%. This shows that both large-scale enterprises and small-scale enterprises have very tight capital chains.
The survey results also show that 93.95% of companies need to finance externally. Among the enterprises that need financing, 76.80% have submitted financing applications to the bank, and the remaining 23.20% of the enterprises are ready to raise funds through other channels. As far as the current financing situation is concerned, the financing obtained by enterprises through various channels can help maintain operation for a limited period of time. 40.92% of companies reflects the funds to maintain the normal operation of less than 3 months, 30.51% of the funds available for the operation of enterprises in the hands of time between 3-6 months (see Figure 8 ).
Figure 8: The financing obtained by enterprises through various channels can help enterprises maintain the operation duration
Survey results also show that the National Federation (see Figure 9 ), corporate demand for funds to meet the rate is not very high, funds to meet the rate of more than 50% of companies only 14.37%. Moreover, the funds counted by the All-China Federation of Industry and Commerce not only include bank credit funds, but also financing obtained by enterprises from non-bank channels.
Figure 9: Rate of satisfaction of corporate capital needs
2. It is difficult for private enterprises to raise funds from banks
Figure 10 shows the current status of private enterprises obtaining bank financing. Almost half of the private enterprises do not have loans at the banks. Of the enterprises that received loans, only 29.81% obtained bank loans of more than 10 million yuan, and 9.62% obtained more than 50 million. Yuan loan. It can be said that although the problem of difficult financing for private enterprises is an old problem, this problem has not been improved to a large extent under the state's introduction of various credit preferential policies. It is particularly worth noting that Figure 10 shows that 49.64% of private enterprises do not have loans in banks, which does not mean that they have sufficient funds and do not need bank loans. Only 11.71% of these enterprises do not need external financing, and the remaining 79.11% of enterprises cannot obtain bank loans for various reasons.
Figure 10: As of the survey day, the size of corporate loans to banks
Figure 11 is the survey results of the National Federation of Industry and Commerce on the difficulty of corporate financing. The proportion of companies that believed that the difficulty of financing from banks from January to April 2020 decreased slightly and significantly decreased was 22.30%, 41.55% of companies believed that the change was not significant, and 36.15% of companies believed that the difficulty of financing increased. This shows that although the state and governments at all levels have issued large amounts of bail-out funds, companies have not experienced a significant decrease in financing difficulty.
Figure 11: Difficulty of financing for enterprises from January to April (National Federation of Industry and Commerce)
3. It is difficult for private enterprises to obtain credit concessions
Recently, governments at all levels have issued various financial preferential policies aimed at helping companies bail out. Statistical results showed that only 10.90% of the enterprises to obtain credit support, 32.45% of the enterprises to apply for a credit support but not ratified, as well as among 44.79% of the company is applying for (see Table 4 ).
Table 4: Corporate financing from banks
Specific to the financial incentives, the survey (see Table 5 ), 10.17% of companies have new loans, 15.74% of the enterprises to obtain credit extension (no principal) to obtain Xudai (after the first bullet loans) Of companies have 8.96%, 12.59% have received interest reductions, only 4.84% have received special loans, and 61.50% have not enjoyed any preferential financial policies. The survey results of the All-China Federation of Industry and Commerce at the end of May were also very similar. Overall, more than 60% of companies do not enjoy any financial incentives, other types of companies enjoy preferential proportion is only around 10% (see Table 6 ).
Table 5: Implementation of various credit preferential policies (multiple choice)
Table 6: Implementation of various credit preferential policies (National Federation of Industry and Commerce survey in May, multiple choices)
4. The long cycle of obtaining bank loans and complicated procedures
Not only are companies less likely to receive credit concessions, but the procedures for obtaining bank loans are also more cumbersome and time-consuming. Statistics show that only 13.08% of enterprises spent less than one month when processing loans ( Figure 12 ), while 86.54% of companies believed that the procedures for applying for loans from banks were cumbersome and very cumbersome ( Figure 13 ) . The data surveyed by the All-China Federation of Industry and Commerce in May also showed that only 20.36% of enterprises received bank loans within one month ( Figure 14 ).
Figure 12: Time required for enterprises to apply for and obtain loans in 2020
Figure 13: Corporate evaluation of bank loan procedures
Figure 14: Approval time for obtaining loans from banks (investigation by the All-China Federation of Industry and Commerce)
5. Lack of collateral is the main reason why private enterprises have difficulty in obtaining loans
The research team also investigated the reasons why it is difficult for companies to obtain bank loans. 45.76% of the companies believe that they are not mortgage or guarantee enough, and 33.9% of the companies think that the main reason for not getting the loan is that they are not in the bank-enterprise docking list issued by governments at all levels. there are 17.43% of companies believe that the major banks have concerns about the prospects for business development (see table 7 ). National Federation of the May survey results also show that lack collateral or security is the main cause of difficult corporate loans (see Table 8 ).
Table 7: Reasons why corporate loans are difficult
Table 8: Reasons for the difficulty of corporate loans (investigation by the All-China Federation of Industry and Commerce)
6. Private enterprises also face more serious accounts receivable problems
In addition to the difficulty of financing, companies also have the problem of difficulty in returning money. 83.78% of companies report that there is accounts receivable, and 54.72% of companies account for more than 20% of revenue in 2019. Among enterprises with accounts receivable, 10.4% of accounts receivable come from government agencies, 27.17% of accounts receivable come from state-owned enterprises and institutions, and 47.11% of accounts receivable come from private enterprises. Source of corporate accounts receivable of different sizes is insignificant, see Table 9 .
Table 9: The company's accounts receivable
V. Financial and tax incentives for private enterprises
1. Basic information on the implementation of preferential fiscal and tax policies
Survey results (see Table 10 ), the current exemption from social security deferral policy implementation is better, there are more than seventy percent of companies received benefits, followed by value-added tax relief policies, provident fund and deferment policies rent relief policy again .
Table 10: Implementation of preferential fiscal policies (multiple choice)
2. Reasons for difficult fiscal and taxation preferential policies
In the survey, the main reason for inadequate research group of companies enjoy preferential policies conducted a survey, see Table 11 . Unclear preferential policies and weak operability are the problems that companies reflect the most. There are too many policies and too long documents, but many policies do not have detailed operating rules, and there is no specific docking department or docking process. 37.05% of enterprises report that they are not within the scope of preferential policies. 30.99% of companies believe that the channels for preferential information are not smooth.
Moreover, after subdividing the scale of enterprises, the research team found that for enterprises of different sizes, "policy is not clear and operability is not strong" are the most important reasons for the poor implementation of policies. Large enterprises are fully capable of understanding the policy, but 47.82% of the enterprises with revenue of more than 100 million yuan also believe that the policy is not clear. This shows that it is not due to the lack of staff to interpret and study policies that make it difficult for companies to enjoy preferential treatment. It is indeed a problem in the design of policies. In addition, different types of enterprises consider themselves "not within the scope of policy preferences" as the main reason for the poor effect of policy preferences, which means that the generalization of policies needs to be strengthened.
Table 11: Reasons for insufficient corporate preferential policies (multiple choice)
3. The preferential range of fiscal and tax policies is not large
The research team also conducted a survey on the strength of financial preferential policies enjoyed by enterprises . Figure 15 shows that the vast majority (74.33%) of enterprises believe that the current fiscal and tax preferential policies can only reduce the cost of less than 5%, and 16.46% of enterprises believe that the policy Preferential policies can reduce operating costs by less than 10%. It can be said that the strength of fiscal and taxation policies is a slash for most companies.
Figure 15: Financial and tax benefits enjoyed by enterprises reduce the proportion of business costs
6. Conclusion
Judging from the situation of the two questionnaires at the end of April and the end of May 2020, the current difficulties faced by private enterprises are very prominent. On the one hand, they continue to "bleed" (there are insufficient orders but still need to pay a large amount of fixed operating costs), on the other hand, Insufficient blood transfusions (difficult financing, less favorable taxation and taxation policies) have led many companies to the brink of failure (50.12% of corporate orders are less than one month old). In fact, the enterprises participating in the survey questionnaire of the Federation of Industry and Commerce are all well-known private enterprises in Wuhan. It can be concluded that the overall situation of Wuhan's private economy should be more severe than the survey results.
As mentioned above, July and August have always been the off-season of business. If the business conditions of many companies do not improve in June, it is very likely that they will not survive. Therefore, there is a "time window" to rescue private enterprises and protect people's livelihood, and various policies need to be "fast, accurate, and ruthless."
The so-called "fast" means that the government must act fast, and it must help enterprises obtain loans, implement various financial concessions, and help enterprises renew the "blood" (capital) before they can survive.
The so-called "quasi" means that policies need to be classified and accurately implemented, so that all kinds of enterprises have a sense of gain. In the survey, both self-employed, small and micro enterprises and medium-sized enterprises complained that they were not within the government's preferential scope. For example, self-employed and small and micro enterprises thought that they could not enjoy financial preferential policies, and medium-sized enterprises thought that they could not enjoy preferential fiscal or tax policies or not. Bank-enterprise docking list. All this shows that the design of policies may be biased toward "one size fits all". There is no hierarchical classification to help companies bail out, and inclusiveness is not strong.
The so-called "cruel" means that the policy needs to be strengthened. At present, many enterprises believe that some preferential policies have little thunder, little concessions, and few procedures, and the procedures are still very complicated. Fiscal and taxation policies have little significance for enterprises to reduce their operating burden. Now, many private enterprises, small, medium and micro enterprises are facing the dilemma of having no work to recover after resuming work. The government's bailout policy is in place as early as possible. This oxygen to the enterprise can be taken in and the enterprise can survive and survive. Difficult.
Luo Zhi and Li Ying (author Luo Zhi is the director of the China New Private Economy Research Center, director and professor of the Economic Department of Wuhan University, and Li Ying is a civil servant of the Wuhan Federation of Industry and Commerce)
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