China supports businesses to overcome the blockade period

Not only with the tourism industry, the blockade of Shanghai, the financial center of Chinaalso severely affected all economic activities of this city, in which small and medium enterprises suffered the most.

Shanghai Baso Food Company specializes in importing seafood from abroad and then processing it for resale to shops and supermarkets in the city. However, the last shipment received by the company took place on March 22 and the goods in stock are now exhausted, while still having to pay compensation to foreign partners.

“Since two weeks ago, our revenue has dropped to just over $7,800, not even enough to pay our employees,” said Dong Weiwen, director of Shanghai Baso Food Co.

Employees work at a vegetable warehouse in Shanghai, China. (Photo: Xinhua)

Rural Commercial Bank Shanghai branch lent Baso Company 3 million yuan, equivalent to 471,000 USD, with a low interest rate of 3.7%. This money saved the company from the risk of declaring bankruptcy.

Last Thursday (March 31) last week, the Ministry of Finance and the General Administration of Taxation of China issued a joint statement, which exempted all small businesses from VAT. 150,000 yuan, equivalent to 23.5 thousand US dollars or less. The application period is from April 1 to December 31 of this year.

“Even if there are unprofitable loans, but the damage is not too great, we will still accept this loss. This policy will give commercial banks more confidence when approving. loan package for small and medium enterprises,” said Mr. Zhao Zhifeng, Deputy Finance Director, SRCB.

Analysts say the prolonged blockade in Shanghai may make it difficult for China to meet its target of 5% GDP growth this year. The government will likely need to launch large-scale economic stimulus packages to keep growth momentum.

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