The coronavirus impact on the economy will be "temporary," and China's economy showed strong resilience, and the country had sufficient policy space to stabilize economic growth, with supportive measures rolled out to help businesses tide over the ongoing epidemic.
by Xinhua writers Ma Yujie, Li Laifang, Peng Peigen, Sun Wenji
BEIJING, Feb. 9 (Xinhua) -- Unprepared for the novel coronavirus outbreak, many businesses in China were caught off guard and found that their bullish performances over the past year were not enough to confront a crisis.
However, governments and financial institutions at all levels have been on the move to help businesses pull through. Many Chinese provinces and municipalities have rolled out supportive measures such as tax and rent deductions, delaying loan payments, cutting interest rates and waiving overdue interest to help businesses tide over the ongoing epidemic.
Workers make protective suits for general purposes at a production line of Hodo Group, a private-owned garment company in Wuxi, east China's Jiangsu Province, Feb. 8, 2020. (Xinhua/Li Bo)
FINANCIAL SUPPORT
"Almost all of our 400 offline stores have been closed due to the epidemic, and we estimated the monthly losses around the Spring Festival would be at around 700 million to 800 million yuan (about 100 million to 114 million U.S. dollars). If the situation continues, our company will not be able to survive in three months," Jia Guolong, chairman and founder of Xibei, a leading Chinese catering chain brand, said in a recent interview.
Xibei, with an annual sales revenue of up to 6 billion yuan and over 20,000 employees, is one of the first to feel the pinch amid the contagion.
"The government, relevant departments and many banks have offered to help," said Jia.
The Shanghai Pudong Development Bank's Beijing branch offered to provide financial support for Xibei and on Feb. 7, a total of 120 million yuan has been transferred to the restaurant giant's account.
Meanwhile, many Chinese provinces and municipalities have rolled out supportive measures such as tax and rent deductions, delaying loan payments, cutting interest rates and waiving overdue interest to help businesses tide over the ongoing epidemic.
A woman prepares paperwork at a tax service center in Panyu District of Guangzhou, south China's Guangdong Province, Feb. 7, 2020. (Xinhua/Huang Guobao)
"We were in urgent need of money, and the loan effectively solved our problem of lacking money to purchase raw materials," said Xu Zhiwen, head of the Guangzhou Evertech Technology Development Ltd. His company sells machines for the development, testing and manufacturing of disinfectants and has been given extra financing quota amid the epidemic.
"The financial support is not limited to enterprises relevant to the epidemic, but all small and micro enterprises in temporary difficulty," said Lu Fenghua, deputy head of an ICBC branch in Guangzhou.
China's central bank has added a total of 1.7 trillion yuan into the banking system recently via reverse repurchase agreements (repos) and lowered the repo rates by 10 basis points (bps) to boost liquidity and stabilize financial markets.
POST-HOLIDAY RESUMPTION OF PRODUCTION
As of Friday, more than half of the 900-plus large industrial enterprises each with annual business turnover of at least 20 million yuan (about 2.8 million U.S. dollars) had resumed or continued operation in the economic development zone of Guangzhou, capital of south China's Guangdong Province, one of the country's economic powerhouses.
Epidemic prevention measures, such as body temperature checks and the use of masks for workers, were adopted in these firms. Two-thirds of the companies will resume production by Wednesday, according to the estimate by the zone management authorities.
Workers produce non-invasive ventilators at a medical technology company in Shenyang, northeast China's Liaoning Province, Jan. 31, 2020. (Xinhua/Yang Qing)
"Our company faces a lot of difficulties at the moment, such as logistics, inventory increase and other problems," said Zhu Jianmin, chairman of Liaoning Oxiranchem, Inc., a high-tech company which produces ethylene oxide-related chemicals, based in northeast China's Liaoning Province.
"Our production has not been halted by the virus outbreak. As more companies began to reopen since Sunday, I believe the connection between the upstream and downstream will be smoother, and these problems will soon be solved," Zhu said.
INNOVATIVE MANPOWER SOLUTIONS
The extended Spring Festival holiday has also made manpower a big issue. While restaurant chain bosses are vexed at how to keep their idle employees busy, retailers are struggling with being shorthanded as online orders keep flooding in.
Data from MissFresh, which specializes in delivering fresh, pre-portioned ingredients, showed its sales soared by 350 percent year on year between Jan. 24 and Feb. 1. Sales of supermarkets and other online platforms also posted strong jumps in January.
The two industries have therefore joined hands with an innovative solution. On Feb. 3, Hema Fresh, Alibaba's fresh food chain, announced it would partner with restaurant chain Yunhaiyao to cope with staff shortage and help the latter turn the corner.
"Since the epidemic outbreak, Hema Fresh's 18 stores in Wuhan have been delivering food and daily necessities for local residents, and we are now providing such services across the country but have been shorthanded," said Hu Qiugen, general manager of operations management of Hema Fresh.
"We came up with the idea of borrowing staff at catering enterprises that have suspended operations due to the epidemic," Hu said. "These employees are bridle-wise and experienced in epidemic prevention and hygiene, so we can save time and cost compared to training fresh hands," said Hu.
PENT-UP DEMAND
Despite a gloomy consumption in catering and entertainment during the epidemic, domestic consumption is expected to rapidly rebound soon after the outbreak.
"Some entrepreneurs say that the epidemic may somehow bring down consumption for now, but it will not eliminate consumption. After the epidemic is over, the consumer market will usher in a green shoot and stocks will soon be digested," said Liu Zhicheng, director of the development and reform commission of Panjin City, Liaoning Province. He believes the novel coronavirus impact on the economy is short-lived.
A worker carries potatoes at a wholesale market, which stays in business amid the current novel coronavirus outbreak, in Shenyang, northeast China's Liaoning Province, Feb. 4, 2020. (Xinhua/Yao Jianfeng)
According to Pan Gongsheng, vice governor of the central bank, the coronavirus impact on the economy will be "temporary." Pan said the economy showed strong resilience, and the country had sufficient policy space to stabilize economic growth.
The epidemic might disturb economic activities in the first quarter of this year, but the economy is likely to steady shortly after the epidemic is contained, as the unleashing of pent-up demands will make up for previous weak economic performance, Pan said.
"If the epidemic is under control, both online and offline consumption will significantly rebound with the recovery of transportation and logistics," said Gan Chunhui, vice president of the Shanghai Academy of Social Sciences. Enditem
(Xu Yang, Wang Wei, Xu Xiaoqing, He Xinrong, Zhu Xiao, Meng Yingru, Lyu Guangyi, Qu Lingyan, Wu Xinsheng, Chen Sijiang, Huang Guobao, Li Bo, Yang Qing and Yao Jianfeng also contributed to the story.)
(Video reporters: Wu Xinsheng, Zhu Xiao, Chen Sijiang, Huang Guobao; video editor: Ma Ruxuan)■