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Over 80 percent of small and medium-sized enterprises (SMEs) have resumed business among 211 SMEs in the petrochemical-related sector in 22 provincial-level regions as of Sunday.

According to a research note sent to the Global Times, 50.2 percent of petrochemical SMEs have resumed business and normal operations, 32.7 percent of petrochemical SMEs have resumed part of their operations, and 17.1 percent of petrochemical SMEs have not resumed work.

The research, launched by the SMEs Working Committee of the China Petroleum and Chemical Association, was sent to the Ministry of Industry and Information Technology.

Due to policies to encourage SMEs to resume work released by the central government, petrochemical SMEs have resumed business. But there are still some difficulties for the industry chain.

Apart from previously suspended logistics, the process of business resumption in the industrial chain remains inconsistent, therefore the petrochemical SMEs that have resumed production face shortages of raw materials or product backlogs, the research reports.

Furthermore, influenced by insufficient protective equipment, strict control of chemical industry parks and quarantine measures, some petrochemical SMEs are barely functioning or have even halted production. 

Most petrochemical SMEs that have suspended production are waiting for approvals from local governments, especially in Central China's Hubei Province amid the COVID-19 outbreak, the research shows. 

"We have applied for the resumption of work, but local authorities have not approved it," a chemical engineering company, located in Luoyang, Central China's Henan Province, said.

A refining company that mainly produces aromatic hydrocarbons, located in East China's Shandong Province, was concerned about transportation cut-offs. "Most of our downstream customers are located in East China's Jiangsu Province, and due to poor transportation, we can't ship goods as we did before the virus outbreak, and our storage limit had been exceeded," an executive of the company told the Global Times.

A new material company, located in East China's Zhejiang Province, said that it is still uncertain when its downstream companies will resume business.

Some petrochemical SMEs that resumed business worry about shortage of protective equipment, some enterprises face shortages of labor or their employees face psychological problems, and some companies are finding it hard to pay salaries due to cash shortages amid the COVID-19, according to the research.

Industry insiders said that local authorities should help enterprises solve problems such as staffing, raw materials supplies, materials transportation, and shortages of protective equipment including masks, disinfection supplies and thermometers. 

Earlier in February, the Ministry of Industry and Information Technology released 20 measures to help SMEs to weather the hard times including promoting financial support and accelerating digital transition. 

Wang Jingmin, secretary general of the SMEs Working Committee of the China Petroleum and Chemical Association, told the Global Times that petrochemical SMEs faced difficulties in financing before the virus outbreak and should get favorable loans from the central government amid the COVID-19 outbreak.

Experts and institutions think there are numerous business opportunities for digital transition and smart manufacturing.

Many petrochemical SMEs are looking forward to more specific implementation details to be released by local authorities about digital transition and smart manufacturing based on previous policies, so they could have the opportunity to apply for national or local subsidies.