SMEs need more support, Fudan Pingan forum told
More support is needed for small and micro-sized enterprises amid the COVID-19 outbreak, a forum hosted by Fudan Pingan Research Institute for Macroeconomy heard.
“Small and micro enterprises account for 95 percent of China's registered enterprises and provide more than 90 percent of jobs,” said Zhang Jun, dean of School of Economics at Fudan University. “It is a unique phenomenon in China. The difficulties they are facing now are not strange, but normal.”
Five guests from high-tech zones, academia and financial institutions took part in a virtual round-table discussion on Wednesday on how to help small enterprises through the global pandemic crisis.
The unexpected outbreak made it harder for such enterprises to raise money, they said.
Jiang Ning, manager of One Connect, a financial and technical support service platform, said: “We did a survey of 42 banks in 29 cities and found that 71.43 percent of small and medium-sized banks are more prudent in lending money to small and micro enterprises because of their relatively low creditability and the uncertainty of resuming business amid the outbreak.”
But on a higher level, China’s big state-owned companies and banks are trying their best to help small enterprises by using big data and 5G networks.
Jiang said One Connection is working with Guangdong Province to put the financing process online, and so far this platform has raised approximately US$2 trillion.
Jiang said some big banks had also put their services online and were using technology, such as facial recognition and electronic contracts, to simplify the loan application process.
Lu Yong, deputy manager of Shanghai West Hongqiao Co Ltd, said: “In February when COVID-19 was most rampant in China, a foreign company wanted to settle in Hongqiao. After they handed in their application online, the terminal approved the business license and business permit in a single day.”
In Zhangjiang Hi-Tech Park, the working area was divided into several enclosed units. He Dajun, manager of Shanghai Zhangjiang High-Tech Park Development Co Ltd, said: “We couldn’t afford to jest about protection. Most small and micro enterprises don’t know how to protect their employees. So we have to do this job for them.”
He said the high-tech park had also reduced rents to help enterprises curtail expenditure. Due to these measures, foreign investment in the first quarter had increased to US$800 million.
Zhang emphasized the important role that small and micro enterprises play in the Chinese economy.
“Walking on a street in China, you can see all kinds of small businesses along the road.”
Zhang said the average lifespan of a small business is three years, which is the main reason for financing problems. If entrepreneurs want to go further, they should think more about management and technology innovation.
Zeng Chenglong, manager of Shanghai Caohejing Hi-tech Park, said: “China is not short of core technology and good business models. The investors are vying for a promising program.”
The round-table discussion was the first of a series hosted by the institute.