IN-DEPTH / IN-DEPTH
China’s self-employed seek lifeline amid pandemic
China’s individual businesses stay upbeat amid pandemic
By Ma Jingjing and Published: Apr 30, 2020 12:15 AM
Editor's Note:
This article is part of a multi-part series Global Times' investigation into the severity of unemployment issues in China in the wake of the COVID-19 epidemic. It encompasses hyped up and false claims by certain foreign media that social unrest in China might be imminent. This article in particular focuses on the impact of the pandemic on 80 million self-employed business owners and their 200 million workers.
"Even if there is only one customer a week, I will feel very happy," a clothes repair store owner in Beijing's sprawling second 21st BLOCK shopping mall told the Global Times with a happy smile.
He said since the store opened on April 1, he sometimes sees no customers for several days due to the coronavirus epidemic. That's not unique to Li but common to the 130 self-owned stores inside the new mall which was launched in October - so common that their greeting each day has become: Did you have any customers today?
However, Li, who has been making clothes for 30 years, remains upbeat about the future. "I believe there will be opportunities for the business… being alive is the most important thing."
Li's example vividly describes the grim situation for more than 80 million self-employed businesses - a unique group that rose from the early days of the country's reform and opening-up policies four decades ago, and their 200 million workers - as well as their remarkable ingenuity and resilience in the face of an unprecedented economic onslaught caused by the COVID-19 pandemic.
Together, self-employed workers represent a crucial proportion of China's job market amid the threat of rising unemployment due to the pandemic. They are also vital to maintaining the country's economic and social stability, experts noted.
Big hit, small help
Self-employed businesses in China are arguably the worst hit by the pandemic, as shops like Li's have no customers and workers from rural areas still face strict anti-epidemic measures that prevent them from returning to big cities like Beijing and Shanghai, Li Chang'an, a professor at the Department of Public Economics at the University of International Business and Economics, told the Global Times on Tuesday.
Inside the shopping mall in Beijing, one can hear the message from a loudspeaker reminding customers to wear masks amid the global pandemic, but few customers are spotted. More than half of the stores are either closed or have withdrawn, leaving behind bare booths with promotion slogans still there. Retailers with their stores open have difficulties.
"It's even worse that there is no one that I can talk to while staying at the store, which makes me feel time passes so slowly," Li said, noting that he sometimes just left the store and went to a supermarket nearby to talk with other workers.
Li said he spent over 100,000 yuan ($14,130) for decoration of the new store as well as paying deposits to the landlord. His store was initially scheduled to open on February 1 but it was delayed due to the coronavirus epidemic.
"We haven't been asked by the landlord to pay rent for March and April, but I believe all of us will withdraw if the landlord moves to collect at this time," Li said. Currently, even with no customers, Li said he is unwilling to withdraw because he can't get back the deposit of 30,000 yuan if he does so.
But while Li remained open, others were forced to close up.
During the global pandemic, the number of active individually owned businesses dropped 40.4 percent, with sales volume slumping 52.4 percent, Wang Jingyi, a research fellow at the Institute of Digital Finance of Peking University, said at a public course held by China Business Journal in mid-April.
In Central China's Hubei Province, self-employed individuals felt more pain and saw sales plunge 70 percent, Wang said, noting that the number of active ones plummeted 60 percent.
"For six months, it is 'all-out' and 'no-in'! And my household spending is 20,000 yuan a month," an urban self-employed entrepreneur from Beijing surnamed Wu told the Global Times.
Adding to the difficulties they already encountered is that many self-employed workers face limited access to various relief measures from the government due to a complex set of factors, including business registration.
Zhou Dewen, deputy director of the China Association of Small and Medium Enterprises, told the Global Times on Wednesday that many self-employed businesses, for example street food stands, are not registered, making it hard for them to get access to favorable policies.
In early March, the Ministry of Finance and five other government departments issued guidelines for financial institutions to issue extra low-interest loans totaling 300 billion yuan to self-employed businesses.
Self-employed businesses will also see a cut in their social insurance contributions, rent and value-added tax burdens, the guidelines said, promising easier access to the market for these businesses.
Self-employed people cannot enjoy the same rent relief scheme as registered companies, Li said.
Positive spirit
However, the predicament they are in did not prevent them from being considerate to others and being optimistic about their future.
Sun Mingyang, manager of Yicheng Property Co in Dandong, a border city in Northeast China's Liaoning Province, told the Global Times on Tuesday that none of his tenants, who are self-employed, have asked to cut the rent.
"Tenants also know that we landlords have our own difficulties. Currently, I still have loans of tens of millions of yuan owed to banks, which didn't cut any interest rates for my loans," he said, noting that the they should huddle together for warmth amid a bad national and global situation.
Many self-employed are also rising up to the challenge and are finding ways to cope with the unprecedented challenge at hand. Some are adapting to different businesses, like promoting their products and services on livestreaming platforms.
"Self-employed people are creative and good at finding opportunities. With positive spirit and help from society, even a cobbler can become a big potato someday," Zhou said.
This spirit has a lot to do with the remarkable sense of solidarity in times of hardship in Chinese society, which was revealed during the country's battle against the coronavirus, analysts said.
"Along with the country's reform and opening-up, increasing attention has been given to vulnerable groups and many policies have been released to protect their rights. I'm confident China is capable of protecting self-employed businesses at this time, which is an embodiment of the superiority of socialism," Zhou said.
Another reason for confidence is the accumulation of financial resources over the past four decades, analysts said.
Although they do not benefit from the social safety net in the same way as those on official payrolls, the self-employed are in a better position to weather the current economic situation after four decades of economic development and wealth accumulation.
More help on the way
However, given that the unemployment issue among the self-employed is so severe and so important to the country's economic and social stability, more concrete measures might be necessary, experts said.
Li Chang'an said the issue faced by self-employed Chinese is one that relates to employment, income, and social stability. "All three are at the top of the Chinese government's agenda," he said, suggesting that there may be an introduction of some legal clauses, such as force majeure, to revoke some of the rents.
Wu, a self-employed Beijinger, also said that more help from officials will help many self-employed businesses stay afloat.
"The community administrative units are perhaps the most powerful entities rising from the fight against the pandemic, and if we could associate life services providers with the community in some way, besides rent payment and collection, then the community can pass on some of the state-lent support to shore up this distressed group," said Wu. "The state is powerful. But it needs to extend its reach to relieve us."
The central and local governments have already released a series of measures to ease the pain for self-employed businesses and workers.
As many migrant workers did not return to cities amid the COVID-19 epidemic, the Chinese government has also tried to help them find jobs locally or in nearby areas, including agricultural jobs or working at rural infrastructure projects, officials with the Ministry of Agriculture and Rural Affairs said on Tuesday.
Efforts also include helping rural workers to get internet-related jobs and work in innovative business models and start-ups, officials said.
In Shanghai, property owners with state capital backing have waived 1 billion yuan worth of rent for over 14,000 tenants, according to media reports in March.
In the famous manufacturing center of Wenzhou, East China's Zhejiang Province, there were over 750,000 registered self-employed businesses by the end of March, accounting for 70 percent of market entities in the city.
The city recently released not only tax and fee cuts to help the self-employed, but also implemented inclusive supervision. Under the additional oversight management, Wenzhou market regulators deal with minor irregular market practices that don't threaten public security and people's property and safety with light punishments, like administrative warnings.
"Chinese self-employed businesses, like green shoots in spring, will come to life after the onslaught of the virus," said Sun, the 28-year-old property owner.
This article is part of a multi-part series Global Times' investigation into the severity of unemployment issues in China in the wake of the COVID-19 epidemic. It encompasses hyped up and false claims by certain foreign media that social unrest in China might be imminent. This article in particular focuses on the impact of the pandemic on 80 million self-employed business owners and their 200 million workers.
Customers are barely seen at one of the most flourishing shopping malls in Beijing's Xidan amid the COVID-19 pandemic. Photo: IC
"Even if there is only one customer a week, I will feel very happy," a clothes repair store owner in Beijing's sprawling second 21st BLOCK shopping mall told the Global Times with a happy smile.
He said since the store opened on April 1, he sometimes sees no customers for several days due to the coronavirus epidemic. That's not unique to Li but common to the 130 self-owned stores inside the new mall which was launched in October - so common that their greeting each day has become: Did you have any customers today?
However, Li, who has been making clothes for 30 years, remains upbeat about the future. "I believe there will be opportunities for the business… being alive is the most important thing."
Li's example vividly describes the grim situation for more than 80 million self-employed businesses - a unique group that rose from the early days of the country's reform and opening-up policies four decades ago, and their 200 million workers - as well as their remarkable ingenuity and resilience in the face of an unprecedented economic onslaught caused by the COVID-19 pandemic.
Together, self-employed workers represent a crucial proportion of China's job market amid the threat of rising unemployment due to the pandemic. They are also vital to maintaining the country's economic and social stability, experts noted.
Big hit, small help
Self-employed businesses in China are arguably the worst hit by the pandemic, as shops like Li's have no customers and workers from rural areas still face strict anti-epidemic measures that prevent them from returning to big cities like Beijing and Shanghai, Li Chang'an, a professor at the Department of Public Economics at the University of International Business and Economics, told the Global Times on Tuesday.
Inside the shopping mall in Beijing, one can hear the message from a loudspeaker reminding customers to wear masks amid the global pandemic, but few customers are spotted. More than half of the stores are either closed or have withdrawn, leaving behind bare booths with promotion slogans still there. Retailers with their stores open have difficulties.
"It's even worse that there is no one that I can talk to while staying at the store, which makes me feel time passes so slowly," Li said, noting that he sometimes just left the store and went to a supermarket nearby to talk with other workers.
Li said he spent over 100,000 yuan ($14,130) for decoration of the new store as well as paying deposits to the landlord. His store was initially scheduled to open on February 1 but it was delayed due to the coronavirus epidemic.
"We haven't been asked by the landlord to pay rent for March and April, but I believe all of us will withdraw if the landlord moves to collect at this time," Li said. Currently, even with no customers, Li said he is unwilling to withdraw because he can't get back the deposit of 30,000 yuan if he does so.
But while Li remained open, others were forced to close up.
During the global pandemic, the number of active individually owned businesses dropped 40.4 percent, with sales volume slumping 52.4 percent, Wang Jingyi, a research fellow at the Institute of Digital Finance of Peking University, said at a public course held by China Business Journal in mid-April.
In Central China's Hubei Province, self-employed individuals felt more pain and saw sales plunge 70 percent, Wang said, noting that the number of active ones plummeted 60 percent.
"For six months, it is 'all-out' and 'no-in'! And my household spending is 20,000 yuan a month," an urban self-employed entrepreneur from Beijing surnamed Wu told the Global Times.
Adding to the difficulties they already encountered is that many self-employed workers face limited access to various relief measures from the government due to a complex set of factors, including business registration.
Zhou Dewen, deputy director of the China Association of Small and Medium Enterprises, told the Global Times on Wednesday that many self-employed businesses, for example street food stands, are not registered, making it hard for them to get access to favorable policies.
In early March, the Ministry of Finance and five other government departments issued guidelines for financial institutions to issue extra low-interest loans totaling 300 billion yuan to self-employed businesses.
Self-employed businesses will also see a cut in their social insurance contributions, rent and value-added tax burdens, the guidelines said, promising easier access to the market for these businesses.
Self-employed people cannot enjoy the same rent relief scheme as registered companies, Li said.
Positive spirit
However, the predicament they are in did not prevent them from being considerate to others and being optimistic about their future.
Sun Mingyang, manager of Yicheng Property Co in Dandong, a border city in Northeast China's Liaoning Province, told the Global Times on Tuesday that none of his tenants, who are self-employed, have asked to cut the rent.
"Tenants also know that we landlords have our own difficulties. Currently, I still have loans of tens of millions of yuan owed to banks, which didn't cut any interest rates for my loans," he said, noting that the they should huddle together for warmth amid a bad national and global situation.
Many self-employed are also rising up to the challenge and are finding ways to cope with the unprecedented challenge at hand. Some are adapting to different businesses, like promoting their products and services on livestreaming platforms.
"Self-employed people are creative and good at finding opportunities. With positive spirit and help from society, even a cobbler can become a big potato someday," Zhou said.
Global Times
This spirit has a lot to do with the remarkable sense of solidarity in times of hardship in Chinese society, which was revealed during the country's battle against the coronavirus, analysts said.
"Along with the country's reform and opening-up, increasing attention has been given to vulnerable groups and many policies have been released to protect their rights. I'm confident China is capable of protecting self-employed businesses at this time, which is an embodiment of the superiority of socialism," Zhou said.
Another reason for confidence is the accumulation of financial resources over the past four decades, analysts said.
Although they do not benefit from the social safety net in the same way as those on official payrolls, the self-employed are in a better position to weather the current economic situation after four decades of economic development and wealth accumulation.
More help on the way
However, given that the unemployment issue among the self-employed is so severe and so important to the country's economic and social stability, more concrete measures might be necessary, experts said.
Li Chang'an said the issue faced by self-employed Chinese is one that relates to employment, income, and social stability. "All three are at the top of the Chinese government's agenda," he said, suggesting that there may be an introduction of some legal clauses, such as force majeure, to revoke some of the rents.
Wu, a self-employed Beijinger, also said that more help from officials will help many self-employed businesses stay afloat.
"The community administrative units are perhaps the most powerful entities rising from the fight against the pandemic, and if we could associate life services providers with the community in some way, besides rent payment and collection, then the community can pass on some of the state-lent support to shore up this distressed group," said Wu. "The state is powerful. But it needs to extend its reach to relieve us."
The central and local governments have already released a series of measures to ease the pain for self-employed businesses and workers.
As many migrant workers did not return to cities amid the COVID-19 epidemic, the Chinese government has also tried to help them find jobs locally or in nearby areas, including agricultural jobs or working at rural infrastructure projects, officials with the Ministry of Agriculture and Rural Affairs said on Tuesday.
Efforts also include helping rural workers to get internet-related jobs and work in innovative business models and start-ups, officials said.
In Shanghai, property owners with state capital backing have waived 1 billion yuan worth of rent for over 14,000 tenants, according to media reports in March.
In the famous manufacturing center of Wenzhou, East China's Zhejiang Province, there were over 750,000 registered self-employed businesses by the end of March, accounting for 70 percent of market entities in the city.
The city recently released not only tax and fee cuts to help the self-employed, but also implemented inclusive supervision. Under the additional oversight management, Wenzhou market regulators deal with minor irregular market practices that don't threaten public security and people's property and safety with light punishments, like administrative warnings.
"Chinese self-employed businesses, like green shoots in spring, will come to life after the onslaught of the virus," said Sun, the 28-year-old property owner.
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