Chen Chunhua: Save SMEs

Feb 05-2020   

The small and medium-sized enterprises (SMEs) stand vulnerable to the fallout of the coronavirus outbreak for various reasons, particularly insufficient cash reserve. Prof. Chen Chunhua, Dean of BiMBA Business School, calls for policy support to the SMEs in an article first published by the Economic Daily.

According to an estimate, over one trillion yuan of revenue might have evaporated in three industries alone: film, catering and retail, and tourism. It rubs salt into the wounds of the SMEs that have only scrambled to pass a tough 2019.

China’s SMEs play a decisive role in job creation and are instrumental in driving innovation, investment and consumption. To survive the onslaught, they must now challenge themselves to drastically slash costs and tap internal potential.

In the meantime, it’s advisable that the government offers policies and measures to help them out. Based on the experiences during the SARS outbreak in 2003, the government should reduce taxation and subsidize SMEs in worst hit industries. It should also allow companies to defer salary payment through mutual agreement with employees. Moreover, it could consider financial support so that the SMEs can defer loan and interest payment in this very special period.