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China rescues small and medium-sized enterprises from "financial boxing"

2020-02-25T16:57:36.458Z



(Combating new crown pneumonia) China rescues small and medium-sized enterprises again with "combination punch"

China News Service, Beijing, February 25 (Reporter Li Xiaoyu) Following the phased reduction and exemption of social security fees, China has introduced "exclusive" benefits such as loans, taxes and fees to small and medium-sized enterprises to combine policies to stabilize the economy.

On the 25th, Chinese Premier Li Keqiang presided over an executive meeting of the State Council and decided to increase financial support for small and medium-sized enterprises to resume work and resume production in accordance with the principles of marketization and rule of law. These include encouraging financial institutions to provide temporary deferred repayment arrangements for loans to principals of small and medium-sized enterprises that meet the requirements and meet temporary liquidity difficulties, including individual industrial and commercial households. Interest payments can be postponed to June 30 without penalty. Increase the re-loan and rediscount by 500 billion yuan, focusing on small and medium-sized banks to increase credit support for small, medium and micro enterprises; encourage and guide national commercial banks to increase their lending to small and micro enterprises, and strive to make small and micro loan interest rates higher than There has been a significant decrease in the year; from March 1 to the end of May, small-scale taxpayers in Hubei Province were exempted from VAT, and the levy rate in other regions was reduced from 3% to 1%.

Compared with large enterprises, small and medium-sized enterprises are more affected by the epidemic due to their weak family base and weak ability to resist risks. According to official data, the resumption rate of small and medium-sized enterprises in the country is currently only about 30%, and the resumption rate of smaller enterprises is lower.

A survey report released by the China Association of Small and Medium Enterprises recently showed that approximately 86.5% of the SMEs surveyed stated that their operations were significantly affected, and nearly 30% of them reported that the impact was "especially serious" and would result in losses. Tight capital is one of the biggest pressures for enterprises. Nearly 90% of enterprises have less than three months of funds on their books and less than 10% of enterprises that can support more than half a year. Due to operational difficulties and difficulties in sustaining funds, nearly 50% of the interviewed companies have laid off staff.

China International Economic Exchange Center Chief Economist Chen Wenling said in an interview with the China News Agency that the intensive introduction of tax and fee reduction and credit support policies for small and medium-sized enterprises can help enterprises restore their vitality as soon as possible, create more wealth, and expand the economy.

Liu Shangxi, president of the Chinese Academy of Financial Sciences, also said that an important task of current macro-control is to implement a "survivability policy", that is, to reduce the burden on enterprises, especially SMEs, to ensure their viability and reduce failures. The measures proposed at the executive meeting of the State Council, coordinating fiscal and financial policies and forming a synergy, will help maintain the capital chain of small and medium-sized enterprises and help them overcome difficulties. Tens of thousands of small and medium-sized enterprises are stable, the supply chain and the industrial chain can run smoothly, the entire economy can cycle, and employment will stabilize.

The central government has made clear that a proactive fiscal policy must be more proactive and a prudent monetary policy must pay more attention to flexibility and moderation. The distribution of exclusive "red envelopes" for SMEs also responds to this latest policy.

It is worth noting that, while lifting the siege for SMEs, China has not relaxed its precautionary measures against risks.

As Xiao Yuanqi, chief risk officer, director of the General Office of the China Banking and Insurance Regulatory Commission, and spokesperson of the General Office said, after the epidemic has ended and normal production and operation activities have resumed, if these companies are unable to repay the principal and interest, the non-performing loans should still Credited. The CBRC did not relax the regulatory standards, but only proposed phased policies and measures to help companies with special difficulties find a way out.

In Chen Wenling's view, China does not engage in “flooding floods”, but rather supports SMEs in a targeted manner, and focuses highly on the key issue of maintaining capital flows and preventing corporate capital flows from breaking. This shows that China is still striving for steady growth. Balance among multiple objectives such as prevention of risks. (Finish)

Source: chinanews

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