Workers make protective suits for general purposes at a production line of Hodo Group, a private-owned garment company in Wuxi, east China's Jiangsu Province, Feb. 8, 2020. (Xinhua/Li Bo)
Unprepared for the novel coronavirus outbreak, many businesses in China were caught off guard and found that their bullish performances over the past year were not enough to confront a crisis.
However, governments and financial institutions at all levels have been on the move to help businesses pull through. Many Chinese provinces and municipalities have rolled out supportive measures such as tax and rent deductions, delaying loan payments, cutting interest rates and waiving overdue interest to help businesses tide over the ongoing epidemic.
FINANCIAL SUPPORT
"Almost all of our 400 offline stores have been closed due to the epidemic, and we estimated the monthly losses around the Spring Festival would be at around 700 million to 800 million yuan (about 100 million to 114 million U.S. dollars). If the situation continues, our company will not be able to survive in three months," Jia Guolong, chairman and founder of Xibei, a leading Chinese catering chain brand, said in a recent interview.
Xibei, with an annual sales revenue of up to 6 billion yuan and over 20,000 employees, is one of the first to feel the pinch amid the contagion.
"The government, relevant departments and many banks have offered to help," said Jia.
The Shanghai Pudong Development Bank's Beijing branch offered to provide financial support for Xibei and on Feb. 7, a total of 120 million yuan has been transferred to the restaurant giant's account.
Meanwhile, many Chinese provinces and municipalities have rolled out supportive measures such as tax and rent deductions, delaying loan payments, cutting interest rates and waiving overdue interest to help businesses tide over the ongoing epidemic.
"We were in urgent need of money, and the loan effectively solved our problem of lacking money to purchase raw materials," said Xu Zhiwen, head of the Guangzhou Evertech Technology Development Ltd. His company sells machines for the development, testing and manufacturing of disinfectants and has been given extra financing quota amid the epidemic.
"The financial support is not limited to enterprises relevant to the epidemic, but all small and micro enterprises in temporary difficulty," said Lu Fenghua, deputy head of an ICBC branch in Guangzhou.
China's central bank has added a total of 1.7 trillion yuan into the banking system recently via reverse repurchase agreements (repos) and lowered the repo rates by 10 basis points (bps) to boost liquidity and stabilize financial markets.
