New law supports SMEs during emergencies

Shanghai shall establish an emergency-relief system for small-and-medium-sized enterprises (SMEs) to help them weather public health crises and natural disasters, according to a new law on supporting the development of such businesses passed by the city’s legislature on Thursday.

To those businesses badly hit by emergencies, governments should roll out targeted policies and measures to help them with financing, paying rent and legal issues and to shore up employment, according to the law.

The law also asks the government to reward or compensate businesses which take part in relief efforts during emergencies.

The government said the city’s SMEs had been recovering well from the setbacks in the first few months this year due to the coronavirus outbreak, with the biomedicine industry “in an explosive growth.”

The number of SMEs established in Shanghai in May was 19.1 percent more than the previous month, according to the government.

To stimulate the economy, the new law also stipulates that the guarantees businesses pay to government guarantee financing agencies should be able to lever bank credit at least five times the amount of the guarantees, which is expected to effectively relieve the thirst for cash for SMEs.