Coronavirus: Beijing to the rescue of small businesses, but exports are falling
65 billion authorized in subsidized loans. 39 billion allready granted in early February. Only 30% of small and medium-sized companies have reopened their doors. The country is losing 320 million euros per week in exports. Hi-tech multinationals are also affected.
Beijing (AsiaNews / Agencies) - The Chinese State Council has authorized the entry of 500 billion yuan (65 billion euros) into the national financial system. Through the Central Bank, this sum will be allocated to small and medium-sized enterprises in the form of loans at subsidized rates. A first tranche of 300 billion yuan (39 billion euros) had already been approved in early February. To date, the government has injected over 1000 billion yuan (around 130 billion euros) to support the economy affected by the effects of the lung epidemic.
According to data from the Ministry of Industry, only 30% of smaller companies have reopened their doors - for larger ones the rate is over 60%. An estimated 63 million are likely to close in the coming months due to lack of funds. Such a prospect represents a "social time-bomb" for the government, given that they employ most workers. Standard Chartered Bank estimates that the workers who have re-entered employment has reached only 47% of the total workforce.
The Chinese authorities have asked commercial banks to extend the granting of loans to businesses that produce in rural areas. State banks will also have to make 350 billion yuan (46 billion euro) available at reduced rates for small businesses.
Beijing is also running for cover to bring industrial production back to pre-coronavirus levels. According to most observers, national GDP growth will slow down to 4-5% in the first quarter of 2020. The country is a central element of the global value chain, especially in the technological sector, but the containers stand empty in the ports r. The International Maritime Transportation Chamber estimates that Chinese industry is losing around 320 million euros per week in exports. Air freight also faces major problems. Large carriers such as UPS, FedEx Express and DHL continue to travel to and from China, but their delivery volume is greatly reduced.
Among the hi-tech giants, Microsoft claims that personal computer sales will decline significantly, given that its Chinese suppliers are unable to produce at the necessary levels. Same problem for Apple, which assembles its iPhones in China. The Beijing Ministry of Industry said smartphone shipments dropped 39% in January (21 million units); the forecast for the first quarter of the year is a decrease of 30% compared to the same period of 2019.