SCIO briefing on the efforts to support the coordinated and orderly resumption of industrial chain operations

The State Council Information Office held a press conference Friday morning in Beijing to introduce the works of the Ministry of Industry and Information Technology and the China Banking and Insurance Regulatory Commission to support the coordinated and orderly resumption of industrial chain operations. March 18, 2020


We've noted that the epidemic has impacted the production and operation of private small and micro businesses, as well as self-employed business owners. In the collaborative resumption of industrial chains, how will you help SMEs resume work and production and realize their synergetic development with large enterprises? What financial supportive measures are being put in place? Thank you.

Xin Guobin:

Thank you for your question. Small and medium-sized enterprises generally have a lower capacity to deal with risk. They suffered a big blow from the epidemic and have greater difficulties in resuming work and production. As the department that oversees small and medium-sized enterprises, helping them resolve problems as they attempt to resume business is our utmost concern. Following decisions made by the CPC Central Committee and the State Council, all localities and departments have issued a series of fiscal, financial and social security policies and measures to help them resume normal business operations. 

First, we lower taxes and fees to reduce their burdens. For example, for a certain period of time, we lower VAT rates for small-scale taxpayers, exempt small and medium-sized employers from paying pension, unemployment and work-related injury insurances and reduce their contribution to employees' basic medical insurance. In addition to these measures, we encourage all localities to lower urban land use taxes, so leasers can lower their rents and property fees for tenants, and thus reduce the operating costs for enterprises. All localities have implemented a series of measures following the decisions made by the CPC Central Committee and the State Council. For example, the city of Qingdao established the "Good Leasers" Platform, which publishes a list of how much rent has been reduced each day by industrial parks, entrepreneurship and innovation bases, mass innovation spaces and so on. As of yesterday, 8292 businesses have had their rent and property fees reduced by a total of 160 million yuan thanks to 187 "good leasers."

Second, supporting measures have been strengthened to ease the financial strain on SMEs. Ms. Yang elaborated on this part just now. We have encouraged financial institutions to provisionally defer loan principal and interest repayments for SMEs. For eligible SMEs that have temporary liquidity difficulties, loan principal and interest repayments can be deferred until June 30. We have also increased the re-lending and re-discount quotas and lowered the re-lending rate, so as to support small and medium-sized financial institutions in offering more loans to micro- and small-enterprises at preferential rates. So far, some progress has been made in implementing these policies. For example, the Bank of Ningbo in Ningbo city has provided interest-free or low-interest loans for up to 30 days to eligible SMEs, allowing them to meet their provisional funding needs.

Third, we have upgraded services to strengthen confidence in MSME development. On February 9, the Ministry of Industry and Information Technology (MIIT) issued a notice on work programs to help SMEs resume operations and overcome difficulties caused by the COVID-19 epidemic. The notice guided local authorities at all levels to apply policies tailored to their local conditions and specific situations, so as to promote the precise resumption of orderly operations of SMEs by region and classification as soon as possible. For example, Guangdong province has established an online platform to respond to the needs of SMEs. By March 10, the platform had responded to a total of 1,998 claims related to SMEs, of which over 98% had been settled. Meanwhile, the MIIT has launched a database on, the official website of China's central government, detailing all the policies that have been applied to support SMEs during the COVID-19 epidemic. The database lists all the supporting policies issued by relevant departments of the central government and local governments at all levels, which can be accessed by MSMEs via In addition, an app for SMEs to self-test their size and type has been developed to facilitate the implementation of preferential policies. We have also launched an online micro-course training program to strengthen guidance and training for SMEs. By March 12, the program included 318 courses and had received a total of over six million visits.

Fourth, we will cooperate and take concerted measures to unblock industrial chains. The interruption of industrial supply chains is the biggest difficulty facing SMEs in their resumption of work during the fight against the epidemic. In terms of breaking points and blockages in different industrial chains, the MIIT has organized for industrial associations and specialists to examine 50-plus major leading enterprises and over 7,000 core small and medium-sized supporting enterprises, and has made coordinated efforts to promote enterprises of all types to resume operation in a concerted way. Alongside the MIIT, local industrial and information technological authorities also followed its example, such as in Jiangxi province, where over 20 events have been held to increase connectivity according to different industries, regions and projects. Consequently, the resumption of work and production for 64 enterprises and 65 providers outside the province and 26 providers within the province has been realized in a timely manner. In the city of Sanming in Fujian province, an industrial chain support platform has been built for the steel, equipment manufacturing, new material, and modern agricultural industries, to match online supply and demand information for equipment production, factories, logistics and raw materials. The city of Shishi launched a successful live-broadcast event selling branded clothes, with turnover amounting to 53.7 million yuan (US$7.65 million) on the opening day. 

The MIIT will do more to help SMEs better resume operation over the coming period in the following four aspects: First, the State Council's leading group in promoting the development of SMEs will continue to play its full part in increasing the publicity and implementation of policies to add more vitality to SMEs. Second, major enterprises in different chains will take the lead in the concerted resumption of work and production for upstream and downstream supporting SMEs and promote their integrative development. Third, high-quality SMEs, including enterprises with high levels of expertise, advanced, unique or self-reliance technology, will take the lead in the orderly resumption of operation for various SMEs on the premise of making good preparations during the epidemic. Fourth, micro and small-sized enterprise demonstration bases for innovation and entrepreneurship and public service platforms for SMEs will play their full part in using new information technology to provide high-quality and efficient online and offline services for their resumption of operation. Thank you.

Yang Liping:

Thanks for your question. Concerning financial support measures, you may notice that most upstream and downstream firms of the core enterprises in the industrial chain are private, micro, small, and medium-sized businesses. Small in scale but large in number, their capabilities against risks are relatively weak. They are more vulnerable to external impact. The China Banking and Insurance Regulatory Commission (CBIRC) has paid great attention to financial service for those enterprises and encouraged financial institutions to increase credit expansion to those enterprises to reduce their financing costs. Here are some data. In 2019, loans to private enterprises increased by 4.4 trillion yuan year-on-year, and the number of enterprises that received loans increased by 31.5%. The annual interest rate on the total loans issued was 93 basis points lower than in the previous year, and the new medium- and long-term loans accounted for nearly 70% of the total new loans. These are all very gratifying changes.

Since the beginning of this year, the CBIRC has continued to promote financial institutions in the banking industry to increase credit supply and reduce overall financing costs to maintain a favorable growth trend in loans to private enterprises. According to relevant statistics, the comprehensive interest rates of enterprise loans dropped after the outbreak of the epidemic. Enterprises, with the effective comprehensive interest rate of existing and new loans dropping to less than 5% for 51% of the total enterprises, which means the financing costs of enterprises have declined further. 

We have just introduced the supporting policies for private, small, and micro-sized enterprises, most of which are upstream and downstream firms in the industrial chain. I want to repeat that in order to help them resume work and production, as well as gain business development, our policies are focused on both existing loans and incremental loans. Regarding existing loans, we will keep lending to medium, small, and micro-sized enterprises (including small and micro business owners and individually owned businesses), never call in loans ahead of the scheduled time, and will avoid delays in issuing loans. How many medium, small, and micro-sized enterprises, small business owners and individually owned businesses are there in total? There are more than 22 million such enterprises, and over 14 million of them are individually owned businesses. The second policy is based on the principle of marketization and legalization. We have implemented temporary measures to defer principal and interest repayment for loans already due since Jan. 25, 2020. The measures work not only for some special groups, such as lorry and taxi drivers, but also for relevant business entities with financial debts during the period when free access to toll roads was given. For those who are unable to repay principal and interest, banks are allowed to provide different support in various circumstances, such as delaying payment of interest, extending principal repayment periods, or rolling over maturing loans. As I just mentioned, for those medium, small, and micro-sized enterprises which have to undergo an extended period for recovery, they can negotiate with banks for a longer extension period beyond June 30. 

We have made a statistical statement based on the effects of the policies issued on March 1, and we received the statement on March 15. We conducted a quick survey on policy implementation in several banks and six provinces as well. According to the survey, many individually owned businesses have already enjoyed the benefits of the policies. For example, the data from the Agricultural Bank of China showed that individually owned businesses accounted for a considerable proportion. The statistics of Huaxia Bank showed that many medium and small enterprises have already gotten benefits from the policies. We believe that with the further implementation of the policies, more enterprises and banks will connect, and more businesses will enjoy the benefits of the policies.  

In terms of increasing the volume of loans, two measures are being considered. One is to continue strengthening credit support. I also have a couple of figures I would like to provide the press. This year, we will continue supporting both private as well as micro- and small-sized enterprises by requiring banks to increase the volume and lower the price of loans. This means that the total amount of loans released will be greater than the amount released previously, and the price of the loans will also be lower than before. The other measure is researching and evaluating the percentage of clients who obtained their first bank loan. This allows more enterprises, which have never received bank loans before, to get funding from banks now. We required five large stated-owned banks to keep growth rate of the inclusive loan balance for micro- and small-sized enterprises over 30% year-on-year for the first half of 2020. Policy banks will add a total of 350 billion yuan in special loans on the basis of last year's amount. In addition, the special loans will be released with preferential interest rates to private, micro-, small- and medium-sized enterprises. This year, different banks and financial institutions will also add over 500 billion yuan in loans for self-employed businesses based on the amount last year. Thank you.

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