Financial authorities aiding virus fight

Huang Yixuan
Shanghai's financial authorities have launched a number of supportive measures designed to help enterprises prosper amid the coronavirus disease outbreak.
Huang Yixuan

Shanghai's financial authorities have launched a number of measures to help the fight against the coronavirus epidemic.

“Since the novel coronavirus outbreak, Shanghai has put forward a series of targeted measures, giving full support to control and prevention as well as to enterprises resuming work and production,” said Li Jun, deputy director of the Shanghai Financial Supervision Administration.

Banks are enhancing the supply of credit funds, such as raising the proportion of credit loans for micro, small and medium-sized enterprises and longer-term loans, increasing the provision of inclusive loans, and making it easier for enterprises to get loans for the first time, Li said. 

As of March 3, banks in Shanghai had  granted 35.7 billion yuan (US$5.16 billion) in loans for the prevention and control of epidemic, having supported a total of 3,049 enterprises, with a comprehensive funding cost of around 3.74 percent.

The accumulative amount of issued financial bonds and special purpose bonds had reached about 13.9 billion yuan by March 3.

Meanwhile, costs for getting loans are getting lower. With special refinancing loans of the central bank, by March 7 relevant banks had granted 327 loans totaling 4.64 billion yuan to 145 key enterprises, with a weighted average interest rate of 2.48 percent. After 50 percent subsidies from the central government, the actual financing cost to enterprises is 1.24 percent, lower than the required 1.6 percent. 

Up to March 7, 17 local corporate banks had granted 172 million yuan in small and micro enterprise loans as well as loans related to agriculture, with a weighted average interest rate of 4.21 percent, lower than the required 4.55 percent. 

At the same time, efforts were made to support the city's domestic and foreign-funded banks to offer preferential loans to related industries and enterprises with interest rates cut by 25 basis points. Shanghai also encourages banks to reduce the cost of inclusive loans this year by another 0.5 percentage points.

In terms of improving the accuracy of credit supply, two batches of 18 banks in total have cooperated with the city’s mobile app which offers big data inclusive financial services, which has so far served 570 companies with 20,000 data queries, and offered support with big data technology in granting 430 million yuan worth of loans to micro, small and medium enterprises.

To ease the burden on SMEs, the city’s office of the State-owned Assets Supervision and Administration Commission waived or reduced their rents in February and March.

Commercial property owners are encouraged to waive or cut rents for tenants, and they can apply for deductions in their own property tax or land use tax, according to Yuan Quan, deputy director of the commission’s Shanghai office.

As of March 8, the city's state-owned enterprises had accepted 14,000 applications from SMEs for rent reductions or exemptions, involving 9.8 million square meters of leased space, with a total of 1.2 billion yuan worth of rent applying to be cut.

Enterprises in Shanghai, meanwhile, are resuming work and production in an orderly manner. The city saw 97 percent of industrial enterprises above a designated size having resumed work by March 8, as well as over 95 percent of cultural enterprises above a designated size, 65 percent of city-level cultural and creative parks, and 65 percent of demonstration buildings and spaces. 

Meanwhile, the rate of work resumption reached 94.95 percent in enterprises related to the production, storage and use of hazardous chemicals. The rate in foreign-funded industries was 99.9 percent, and 99 percent in foreign-trade industries. 

In commerce and trade, 98.8 percent of supermarkets, 98.9 percent of shopping centers, 92.7 percent of convenience stores, 95.2 percent of logistics firms, 98 percent of vegetable markets and 62.6 percent of food and beverage service companies had reopened for business.

All e-commerce platforms, commodity firms and agricultural wholesale markets had resumed work, said Zhang Jianming, deputy director of the Shanghai Commission of Economy and Informatization.

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