New measures support businesses through crisis

Shanghai government has introduced 28 measures to steady businesses during the novel coronavirus outbreak, with immediate effect.

"The measures pay close attention to those key enterprises working in prevention and control of the epidemic, as well as the hardest-hit industries and small and medium-sized enterprises. They also take into account those that have suffered from delays in resuming work," said Ma Chunlei, deputy secretary-general and director of the Shanghai Development and Reform Commission.

"Since the end of January, we have taken a problem-oriented approach and focused on the particular concerns of enterprises," Ma said.

The government received the results of more than 4,000 online questionnaires on the main difficulties and expectations of enterprises and used the findings as the basis for the new policies.

The measures, which will help cut down the costs of affected enterprises by 30 billion yuan, lay emphasis on support for enterprises at the frontline of virus control, reducing the burden on companies of all kinds, increasing financial assistance, stabilizing employment and resuming work in an orderly manner.

For instance, there will be a one-time pre-tax deduction for the purchase of equipment needed for manufacture of epidemic prevention materials. Income from transporting key materials, providing public transportation or daily-life services and postal express delivery shall be exempted from value-added tax.

Registration fees for relevant drugs and devices, as well as the Civil Aviation Development Fund shall also be exempted, with airlines and related services suffering particular difficulties.

Credit support will be made available for key enterprises making contributions to epidemic prevention and control, including small and micro enterprises. Loans will be given at a 50-percent discount to keep the corporate lending rate below 1.6 percent.

To encourage production and imports of epidemic prevention material, financial subsidies of 50 to 80 percent will be available. 

As some SMEs are suffering heavily, the city will reduce or waive rents for business premises. 

Financial difficulties and funding costs are to be reduced. Low-cost financial support is available to enterprises through various means, and financial institutions should increase their credit allocation to businesses heavily affected by the epidemic, with interest rates reduced to at least 25 basis points below the prime rate.

New government loan guarantees in 2020 will increase by at least 3 billion yuan and the fee for new applications by micro, small and medium-sized enterprises shall be cut to 0.5 percent per year.

Local authorities will make better use of one-stop online platforms offering government services and pursue examination and approval processes that avoid face-to-face contact.

Ma also made it clear that the measures were in immediate effect and would not expire until three months after the outbreak was officially declared over. 

Also of note, foreign-funded enterprises will enjoy identical treatment to local businesses.

“Shanghai is creating a fair and just business environment. In the current crucial period, foreign and domestic enterprises will receive policy support on an equal footing with local concerns,” said Xu Wei, director of the city's information office.