China has taken various measures to ease the burden that COVID-19 has placed on businesses.

 

Major state-owned banks are expected to increase inclusive loans for micro and small firms by 1.6 trillion yuan (about 237.1 billion U.S. dollars) this year to step up financial support for businesses, according to a State Council executive meeting earlier this month.

 

The meeting also called on banks to renew loans, extend and adjust repayment arrangements, and waive default interest for micro, small and medium-sized enterprises and self-employed households as appropriate.

 

"Currently, small and micro firms are facing challenges and need stronger support from the government and financial institutions," said Liu Xingguo, a researcher with China Enterprise Confederation.

 

In the first quarter of 2022, outstanding inclusive loans to small and micro firms climbed 22.6 percent year on year, while total new loans issued stood at 8.6 trillion yuan, up 445.5 billion yuan from a year ago, official statistics showed.

 

"We are using all possible means to help small and medium-sized enterprises (SMEs) overcome difficulties, increase their confidence and stabilize their expectations," Xu Xiaolan, vice minister of industry and information technology said Tuesday at a meeting for addressing the difficulties of SMEs.

 

So far this year, the central government has rolled out 17 policies to support SMEs, while local governments have launched 52 policies with the same goal in mind, noted Xin Guobin, vice minister of industry and information technology.

 

In COVID-hit Shanghai, financial institutions have issued 33.5 billion yuan of loans to enterprises supplying daily goods and offering logistics services since March, said Yu Wenjian, an official with the Shanghai head office of the People's Bank of China.

 

The institutions have also issued 72.3 billion yuan of loans to over 10,000 companies in the catering, retail, tourism and transportation sectors, which have all been impacted by the epidemic.

 

In Beijing, policy funds of no less than 150 billion yuan are expected to be issued to support market entities in 2022, according to the People's Bank of China.

 

Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission, also noted at an interview earlier this month that more attentive and accessible financial services will be extended to hard-hit areas like the city of Shanghai and Jilin Province.

 

Many of China's financial and fiscal policies have already helped enterprises through these difficult times.

 

Fuxeon Fire-fighting Technology Co., Ltd., based in the private company hub of Quanzhou in east China's Fujian Province, experienced a COVID-19 resurgence in mid-March that disrupted logistics services and drove up the price of raw materials.

 

"We were facing great pressure in controlling the cost," said Huang Jiafu, general manager of the company.

 

He later learned from the local tax department that the company can apply for deferred tax for the fourth quarter of 2021 and the first quarter this year.

 

"Benefiting from this policy, we have enjoyed more than 700,000 yuan of deferred tax amount, which effectively eased our financial strains," Huang said.