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Blockbuster! Support Measures for SMEs

2020-02-12    Author:   Source:Chinadaily   Views:496    

coronavirus,china,small and medium-sized enterprises,SMEs,International Fastener Show China

The central government has unveiled a raft of measures to shore up the job market amid the novel coronavirus pneumonia outbreak, with experts urging stronger support for small and medium-sized enterprises and workers employed on flexible terms.

In a notice published on Feb 5, the Ministry of Human Resources and Social Security and four other central government departments urged local authorities to take forceful steps to meet the demand for labor from key businesses closely related to epidemic control and prevention, the operation of public services and the provision of daily necessities.

The Ministry of Industry and Information Technology issued 20 policies and measures to support small and medium-sized enterprises to resume production to tide over difficulties.

To help SMEs stabilize their hiring, the notice said preferential loan application policies will be offered to individuals and small and micro-sized businesses that have lost sources of income during the outbreak.

Businesses affected by the outbreak will be offered government subsidies to step up training for their workers through online or offline channels, it added.

Local authorities nationwide previously rolled out policies to bail out SMEs, which contribute over half the country's tax revenue, over 60 percent of its GDP and over 80 percent of urban employment.

Pan Gongsheng, deputy governor of the People's Bank of China, told a news briefing on Friday that small and micro-sized businesses are more susceptible to impacts from the outbreak because they are less able to protect themselves from risks, and thus require special support from the authorities.

However, Pan said the impact of the outbreak on the Chinese economy will only be temporary, and will not change its positive long-term fundamentals.

"The Chinese economy has shown strong resilience, and we have ample policy tools to stabilize China's economic growth," he said, adding that facilitating the financing of small and micro-sized businesses will be the top priority for the financial system this year.

Researchers from the Chongyang Institute for Financial Studies at Renmin University of China wrote in a research note that SMEs will struggle to sustain themselves for a long time during the outbreak due to the cost pressures of staff wages, rents and bank loans.

"The closing of businesses will result in a spike in the unemployment rate and thus affect social stability," they wrote.

They urged local authorities to encourage businesses to resume work as soon as possible, saying the industrial system is a closely connected and interdependent chain.

It is also important to employ new financial methods to ensure more targeted liquidity support can be channeled to SMEs to restore their confidence, they said.

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