Workers hurry to produce protective suits and face masks at a factory in Hai’an, East China’s Jiangsu Province on Thursday amid the nationwide battle against the coronavirus epidemic. Photo: cnsphoto

 
Micro and small businesses in the Yangtze River Delta are faced with challenges amid the coronavirus outbreak, from inefficient raw material supply and manpower shortage to tight cash flow.

Xu Zhongliang, owner of a small textile factory in East China's Zhejiang Province, told the Global Times on Wednesday that he bought new machines and rented a bigger factory with bank loans at the end of 2019, hoping to increase capacity in 2020. But now he can do nothing but wait for his employees to come back from their hometowns.

"Economic losses could reach 100,000 yuan ($14,285) if my factory can't start operation by the end of February," he said, worrying that he would possibly breach the contract with his client as he can't meet the delivery rate.

He is also worried that he can't pay the loan on time if the situation worsens.

Zhou Liang, vice chairman of China's Banking and Insurance Regulatory Commission, said at a Thursday press conference that, affected by the epidemic, the non-performing loan ratio of small and micro enterprises is predicted to increase.

But Zhou said the bank provision coverage ratio now has reached over 180 percent, which can provide sufficient resources to cope with the unfavorable rise.

Service industry sectors including restaurants and retail were the first to be affected amid the epidemic outbreak. Cathy Ma closed all her six small restaurants across Shanghai from January 29, as per the suggestion from the shopping malls. 

One of her restaurants, in the city's Minhang district, could suffer a loss of 80,000 yuan in February. But the good news is that one of her landlords halved her rent for February, which is a relief to her, she said. "If the epidemic continues, I hope the government can provide loans with lower rates to support us."

To curb the spread of the coronavirus, Suzhou in East China's Jiangsu

Province extended the holiday to February 9. Zhou Runzhi, owner of a factory producing elevator parts for a Finnish company in Kunshan of Suzhou, told the Global Times on Wednesday that only eight of his 40 employees are ready to resume work now.  

His client bills are suspended. "10 percent of the annual profit will be lost if production can't get started before the end of February," Zhou said. But he is still optimistic about the future of his business as he has no loans and his stock and cash flow can still sustain for a while.

Recently, local governments in the Yangtze River Delta including Shanghai, Huzhou, Ningbo and Suzhou have been rolling out measures to support small enterprises amid the virus outbreak with favorable policies in rents, tax, loans and financing.

For instance, Suzhou announced on February 2 that all banking institutions need to ensure the credit balance of small and micro enterprises in 2020 is not less than the balance of the same period in 2019, and must not withdraw or cut off loans for small and micro enterprises.

Song Qinghui, an independent economist, said governments might roll out some more specific measures, such as lowering loan interest rates, reducing overdue interest and rents, as well as providing certain subsidies for severely hit small and micro enterprises to help them survive.

"The epidemic has had a big impact on the tourism, catering, transportation, film and television industries nationwide," Song said, noting that small and micro enterprises are more susceptible to the economic repercussions caused by the epidemic.