individually owned businesses—The NCP has caused great impact on small and micro enterprises. More than 90% of them have delayed their operation, nearly 50% have delayed for more than two weeks, and a large proportion have not yet to set a time for starting work. The main reason for the delay is that the Spring Festival holiday has been extended amid the ongoing epidemic.

It’s difficult for most small and micro enterprises to operate for more than three months by relying on their own capital. If the impact of the epidemic continues, one of the most effective solutions is to change their business direction, and salary reduction and layoffs are highly possible.

Severe impact of NCP on enterprises

There are three common reasons for the delay, among which the main reason is that the Spring Festival holiday is extended, the second is that enterprises worry about the epidemic and actively delay starting work, and the third is that it’s difficult for employees to return to work over the coronavirus period. Relatively speaking, the proportion of other indirect reasons such as insufficient orders is small. At the same time, the proportion of small-scale enterprises is lower than that of large-scale ones due to the extended holiday and difficulty for employees to return, while the proportion of enterprises who actively delay starting work is large.

On the whole, the largest proportion of enterprises (42.13% in total) believe that traffic control or insufficient transport capacity are the main reasons for operational difficulties, followed by those who believe the reason is tight cash flow (19.97%) and fear of staff infected by the virus (19.93%).

If the epidemic continues, 28.87% of small and micro enterprises believe that they can operate with their own capital, among which 25.56% can operate for three months or so, 20.87% for two months or so, and 7.73% for one month or less. Altogether, more than half of small and micro enterprises cannot operate with their own capital for more than three months. For those enterprises of different types and sizes, there is only a slight difference in this proportion. 

Enterprises are faced with problems concerning operating with their own capital.

If the epidemic continues and affects the operation of enterprises, the small and micro enterprises who plan to develop other markets account for 55%; those who plan to reduce business and salary for 35.40% and 14.02% respectively, and those who choose layoffs for 12.05%. Relatively speaking, the proportion of or smaller enterprises choosing to close down is very high.

Over the coronavirus period, small and micro enterprises most hope that the government will take actions such as tax reductions, fee cuts and exemptions, direct subsidies, loan increase and interest discount. As for policies, they most need the government to reduce traffic control and operating control, and allow flexible employment. Larger enterprises hope to receive a higher proportion of tax reductions, fee cuts and exemptions and direct subsidies.

According to the above survey results, we believe that to stabilize small and micro economy, the following policies should be further promoted:

Continue to increase direct support to small and micro enterprises, including tax reductions, fee cuts and exemptions, direct subsidies and loan with interest discount, with the principle of mutual help and support. All this will have direct and rapid effects on those enterprises whose revenue stream has dropped sharply. Local governments are mainly responsible for the implementation of the policies, and the central government shall give special transfer payments according to the number of local enterprises and employees.

Relax various controls as soon as possible. Traffic control is very strict in areas hard-hit by the virus, such as Wuhan, but the survey shows that traffic control is common across the country and is the biggest factor affecting the future operation of small and micro enterprises. Local governments should relax traffic control according to the local epidemic situation. Similar suggestions also apply to operating control.

Increase publicity of the policies while implementing them. Many enterprises are not clear about the policies already implemented, which is not conducive to achieving actual results brought by the policies. The reason for this is that when different departments formulate different support policies, each of them has different capabilities to publicize. Thus, these policies should be regularly and frequently published by the most influential media in all regions.

On February 3, the Standing Committee of the Political Bureau of the CPC Central Committee held a special meeting, which mentioned that Party committees and governments of all levels shall fully support production resumption of enterprises while bringing the epidemic under control. At present, various measures have been introduced from the central government to the local governments to help medium-sized, small and micro enterprises emerge from the hard time.

To fully support enterprises in fighting against the epidemic, fiscal, taxation and financial policies have been issued intensively to clarify tax reductions, fee cuts and exemptions and preferential policies for enterprises, so as to help them stabilize production and ease their burden.

Interest discount will be allocated to reduce financing costs for enterprises.

Loans reduced, rescinded and cut off blindly shall be stopped.

Tax and fee reduction

The Ministry of Finance and the State Taxation Administration issued the Notice on Taxation Support to NCP Prevention and Control. The longest carry-over period of losses incurred by enterprises in difficult industries affected by the epidemic in 2020 will be extended from 5 to 8 years. The difficult industries include transportation, catering, accommodation and tourism (travel agencies and related services and scenic area management). And specific standards shall be implemented in accordance with the current National Economic Industry Classification.

According to Announcement No.11 [2020] of the Ministry of Finance and the National Development and Reform Commission, registration fees shall be exempted for medical devices that are under the emergency approval procedure and can prevent and control the 2019nCoV; registration fees shall be exempted for drugs that are under the special approval procedure and can treat and prevent the 2019nCoV.

The Notice on Taxation Support on Public Donation to NCP Prevention and Control issued by the Ministry of Finance and the State Taxation Administration points out that enterprises and individuals are allowed to deduct in full the amount of cash and goods donated to the NCP through public welfare social organizations or people's governments at or above the county level and their departments when calculating their taxable income.

According to the Notice on Enpterprise Electricity Price Waiver during the Epidemic Period issued by the National Development and Reform Commission, can apply for capacity reduction, suspension, .

The General Office of the Ministry of Culture and Tourism (MCT) issued the Circular on Provisionally Refunding Some Deposits for Tourist Service Quality to Support Travel Agencies in Dealing with Business Difficulties. The Circular states that the MCT has decided to refund provisionally a certain percentage of the deposits for tourist service quality to travel agencies, and the refund standard is 80% of the amount currently paid. The deposits already frozen by courts are not covered by the provisional refund.

While the central government make the comprehensive deployment, different regions across the country have taken various measures to help enterprises out of the hard time.

On February 7, Shanghai issued 28 comprehensive policies and measures, including: reduction and exemption of rent for enterprises, extension of tax returns, exemption of regular and fixed-sum taxes imposed on individually owned businesses, provisional refund of deposits for tourist service quality and subsidies for cultural undertakings, refund of the unemployment insurance fee for steady employment, deferment on adjusting the social security payment base, extension of the due date for payment of social security, and reduction of the medical insurance premium rate for employees.

Guangdong issued 20 policies and measures, including: reduction of social insurance contributions, implementation of refund of the unemployment insurance fee for steady employment, subsidies for stabilizing and supporting employment, , reduction of rent for enterprises, and increase of financial support for technological transformation.

On February 7, Shenzhen issued 16 measures, including: reduction of rent of property management, extension of the due date for payment of social security, reduction of electricity costs for businesses, deferred payment of taxes and enhanced efforts to stabilize and support employment.

On February 4, Chongqing issued 20 policies, including: , deferred payment of taxes, extension of the due date for payment of social security, implementation of refund of the unemployment insurance fee for steady employment, reduction of deposit of the housing provident fund and electricity and gas costs for enterprises, reduction and exemption of rent, and ensuring credit balance of small and micro enterprises not to be decreased.

On February 5, Sichuan issued 13 measures, including: reduction and exemption of rent for medium-sized and small enterprises, , extension of the due date for payment of social security, reduction of social the security premium rate in stages, increase of financial support and enhanced efforts to stabilize employment.Shandong

tax deductions

On February 5, Zhejiang issued 16 measures, including: reduction of electricity, gas and logistics costs for enterprises, tax deductions for small and micro enterprises, deferred payment of taxes, extension of the due date for payment of social security, refund of the unemployment insurance fee, reduction and exemption of rent for small and micro enterprises, support for small and micro enterprises parks and enhancement of credit relief.

On February 5, Hainan issued 8 measures to support medium-sized and small enterprises to emerge from the hard time, including: extension of the due date for payment of social security, reduction and exemption of rent, reduction of the housing provident fund deposit ratio, partial tax deductionsand deferred payment of taxes.

On February 6, Liaoning issued 25 policies, including: extension of the due date for payment of social security, implementation of refund of the unemployment insurance fee for steady employment, tax deductionsfor medium-sized and small enterprises, deduction of the interest of direct investment enterprises from provincial industry (startup) investment guidance funds, reduction and exemption of rent for medium-sized and small enterprises, and relief of pressure of energy use for enterprises.Shanxi

On February 2, Suzhou issued 10 measures, including: implementation of refund of the unemployment insurance fee for steady employment, extension of the due date for payment of social security, reduction and exemption of rent, tax deductions for medium-sized and small enterprises, deferred payment of taxes and support for small and micro enterprise parks.

Protecting the enterprises is to protect the employment, and protecting the employment is to protect the greatest work of livelihood. With various support policies implemented one after another, the negative impact of the epidemic is expected to gradually disappear, and small and micro enterprises will be able to emerge from the hard time and resume production.