Shanghai announces US$21b relief package for SMEs

Zhu Shenshen
Shanghai has announced a 140 billion yuan package to assist SMEs affected by the lockdown. Financial institutions have also lowered interest rates for companies applying for loans.
Zhu Shenshen

Shanghai will offer a package of 140 billion yuan (US$21.5 billion) to help businesses deal with pandemic difficulties. The package includes tax and rent reductions, as well as financial and material assistance, city officials said.

According to the Shanghai Commission of Economy and Informatization, other measures include a public service platform that offers free software and online tools, as well as a city-level contest to collect technology innovations to aid work and production resumption.

At a conference on Thursday, Wu Jincheng, the commission's director, said, "They (firms) are facing serious difficulties and challenges now, especially the SMEs."

Small and medium-sized businesses represent the "main body" of the economy and employment stability, he said.

The SMEs' work resumption rate, which includes both offline and online activities, is about 65 percent, which is lower than that of large corporations. For example, nearly 90 percent of big integrated circuit manufacturers have resumed manufacturing, with several operating at full capacity.

Catering, entertainment, maintenance, testing, logistics, and other productive service industries are among those hit hard by the epidemic, according to Wu.

The 140 billion yuan package mostly consists of tax cuts, rent reductions or exemptions, cash subsidies, and material assistance, primarily pandemic prevention and food supply materials. The package is estimated to assist 1 million businesses. Wu said small and medium-sized businesses will be given priority.

Financial institutions are offering competitive interest rates of less than 5 percent and waiving guarantee fees for loans. Shanghai will examine and optimize more relevant enterprise rescue policies in the near future.

Companies can seek assistance through a variety of bureaus or directly online. The commission has developed Yiqifu (益企服), a one-stop online service that aims to assist businesses to speed up work resumption.

Since May, Shanghai firms have been given access to free software and online tools to help them restart work and production. The tools contain 65 software and web solutions made by over 50 companies, including Huawei and Tencent, according to the service platform GongFu Endustverse, an Internet industry association certified by the commission.

The commission also opened a city-level 5G application and innovation challenge this week, asking individuals and institutions to contribute ideas and applications on industrial, everyday life, and urban management sectors. The contest's objective is to fight against the epidemic and help enterprises restart employment and production, the commission stated.

The results will be announced in August.

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