Concerns linger for virus-plagued businesses in China
Global Times
By Li Qiaoyi and Shen Weiduo Source:Global Times Published: 2020/3/30 17:43:40
Nationwide efforts to restart the coronavirus-battered Chinese economy seem to have proceeded by fits and starts amid an explosion in confirmed cases in Europe and the US, with authorities and industry insiders voicing concerns over the plight of life services providers, exporters as well as small and micro businesses.
Still, a reassuring message sent by Chinese President Xi Jinping from a frontline workplace inspection over the weekend has revitalized the country for its fight on both virus and economic fronts.
On Sunday, Xi visited the Ningbo-Zhoushan Port and an industrial park for auto parts and molds in Ningbo, East China's Zhejiang Province, to inspect the resumption of work and production, according to the Xinhua News Agency.
By Sunday, 76.8 percent of the country's small and medium-sized enterprises (SMEs) had resumed work and production, Liang Zhifeng, an official with the Ministry of Industry and Information Technology (MIIT), said at a press conference on Monday.
The factory and construction sectors have posted higher resumption rates than manufacturing-related services industries, while life services providers face more hardships in resuming operations compared to manufacturing services businesses. Exporters face mounting pressure from the spread of the pandemic outside of China, according to Liang.
SMEs with specific, unique and innovative prowess have resumed work at a rate higher than the overall average, the MIIT official disclosed. Businesses of a larger size have also reported a higher rate of work resumption, while micro businesses encounter more hardships in resuming work and production.
Data provided on Monday by Xin Guobin, vice minister of the MIIT, showed that major Chinese industrial firms had recorded an average reopening rate of 98.6 percent by Saturday, and an average of 89.9 percent of their employees had returned to work.
Restaurants now only see 50 percent of their usual customer numbers as most people, still afraid of possible coronavirus infection, dare not eat out - though plenty of disinfection work has been carried out, Liu Renjun, owner of the Hunan Xiangjun Catering Co, told the Global Times on Monday.
Liu said the weeklong Spring Festival holidays should have been a peak season for the restaurant business, but he has seen "no income" over the last two months.
"Our cash flow is gradually recovering now with millions in the account, but that amount is because we haven't yet paid our suppliers," Liu said, adding that many of his peers have closed their businesses due to cash flow issues and being unable to take out loans.
In efforts to relieve the pinch felt by SMEs, the MIIT on Monday said it has pushed for relevant government bodies to lower the levy rates of value added taxes for small taxpayers, reduce social security payouts, and postpone housing provident funds which are supposed to be paid by companies, among a raft of fiscal and financial measures.
In a coordinated push, 92 leading companies have played their parts in getting over 400,000 upstream and downstream SMEs humming again.
The industry watchdog also disclosed on Monday that more than 200 billion yuan ($28.19 billion) of the special-purpose refinancing for key companies tasked with virus containment and prevention has been granted to over 5,000 businesses.
Significantly, lingering fears over the rapid spread of the coronavirus pandemic means that bigger Chinese cities, especially Beijing, are still on edge over the risk of imported infections, which has resulted in resumption setbacks for life services providers.
Just days after reopening, cinemas across the country have been ordered to close again. Karaoke bars have also once again been shuttered, shortly after resuming operations.
"We have closed three branches in Shenzhen since we could not afford the rent - which is hundreds of thousands of yuan every month for each branch - together with operational costs of about 300,000 yuan for each branch," an employee of an education institution surnamed Zhu in Shenzhen, South China's Guangdong Province, told the Global Times on Monday.
The employee said their training center has been closed for three months as the education industry is not yet allowed to resume work due to the virus.
The country's exporters, which have largely resumed work following sprawling efforts over past weeks, have also expressed new concerns lately, as they are worried their overseas customers may lose payment capabilities due to the pandemic. If the pandemic continues to spread, they may soon "be forced to take a holiday."
"Full production has been resumed for two weeks, with all employees back to their positions and ramping up efforts to complete orders placed before the Spring Festival holidays," Li Xiaozhao, owner of a small-scale furniture factory in Dongguan, South China's Guangdong Province, told the Global Times on Monday.
"We are expecting a sharp decline in orders, even a possible drop to zero, by mid-April or May given the current pandemic situation. By then, we may have to ask our workers to take a break," Li said.
A manager of a shoe-making company based in Guangzhou surnamed Xie told the Global Times on Monday that the two important industry expos which his company had planned to take part in, which were scheduled to take place in March and April, were also delayed due to COVID-19. The expos are significant events for the firm to find orders.
If foreign orders continue to decline or even drop to zero, it would "cause much trouble for us," Xie said.
Fully aware of the pressure and impacts of the pandemic on the country's export-oriented firms, officials on Monday vowed to help affected businesses in two ways: Stimulate demand and strengthen policy support.
"For instance, we will work with several industry associations and e-commerce platforms to promote consumption by organizing special online sales activities for enterprises related to textiles, clothing, light industrial products, toys and furniture," Xin said.
The government is also considering ways to organize online industry exhibitions to help firms gain orders, the vice minister disclosed.
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