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Employees Get Together, but No Overseas Orders? Changning Helps Enterprises to Supple

Employees are going back to the city and production has resumed, but overseas orders are dropping. In April, some small and medium-sized enterprises are in urgent needs of relieving the stress on capital chain through financing loan.


On April 22, Changning signed a contract for establishing a cooperation mechanism between the government, chambers of commerce, banks and enterprises. This mechanism encourages chambers of commerce and trade associations to support small and medium-sized private enterprises to resume production and business operation, solves financing problems for private enterprises and accelerates innovation and transformation of enterprises.


This mechanism comprises the United Front Work Department of the Changning District Party Committee, Changning District Finance Bureau, the Changning District Investment Promotion Office (the Finance Office), Changning District Civil Affairs Bureau (Social Organization Management Bureau), the Changning District Federation of Industry and Finance (the General Chamber of Commerce), the Changning District Finance Association, the Changning District Trade Association, financial institutions, banks and representatives from private enterprises in Changning. A total of 7 banks, including Bank of China, Industrial and Commercial Bank of China, Bank of Shanghai and Shanghai Rural Commercial Bank, will make financial products for small and medium-sized enterprises in Changning. Bank of Communications launches full-life-circle financial service programs for technological innovation enterprises. China Construction Bank launches targeted service programs, including “cloud tax credit” and “cross-border quick loan” programs for enterprises. Shanghai Pudong Development Bank launches credit giving products for small and medium-sized enterprises.


By 2019, the total amount of bond in 124 bonding companies in Changning District has reached RMB372 million. This figure doubled the figure in the end of 2018, and explored an effective new channel of financing for small and medium-sized enterprises. According to Jin Xiaoqi, head of Changning District Finance Bureau, this mechanism is integration for various social resources to solve the financing problem of enterprises. Since the COVID-19 epidemic breaks out, Changning gives full-amount subsidy for financing guarantee expense to enterprises that are seriously influenced by the epidemic and are qualified for getting financing guarantee before loan repayment. By the end of March, 6 enterprises, e.g. ZUCZUG Fashion Co., Ltd and Bankeys Technology Co., Ltd, got RMB36 million of financing guarantee from the government.


Dobe is a well-known innovation park brand in Shanghai. By mid-April, no cases of COVID-19 infection were detected in the company’s innovation parks in Shanghai, Beijing, Nanjing, Hangzhou, Chengdu, Changsha, Florence in Italy and Silicon Valley in U.S. Work resumption rate reaches 80 percent. Recently, enterprises in the innovation park encountered some financing problems. Enterprises do not know how to apply loan, and some of them are unqualified for applying loan or dare not to apply loan. To solve these problems, Dobe joined hands with China Merchants Bank and launched an online financing channel. So far, a total of 44 enterprises in 35 innovation parks have viewed the online website for thousands of times. A total of 5 enterprises have sent application forms to the website.


According to Jia Bo, chairman of Shanghai Dobe Cultural and Creative Industries Development (Group) Co., Ltd, while serving enterprises and customers in the epidemic period, the innovation park truly understood the changes in enterprise’s needs in a special period. “Sometimes it’s difficult for enterprises to understand policies, and they don’t have time to read them. Therefore, we need to establish a bridge of communication. Chambers of commerce in sub-districts and trade associations could bear this function.” Some enterprises hoped that banks would offer more supportive financial policies, streamline procedures and shorten the period of examination and approval.


According to Long Wei, head of Huayang Road Sub-district Chamber of Commerce and founding partner of DL Capitals, the chamber of commerce shouldered a heavy responsibility to offer policy consultancy service to enterprises in the epidemic era. The establishment of the cooperation mechanism will ensure those effective cooperation mechanisms being established in the epidemic era to function on long-term basis. In February this year, Meituan Meal Delivery’s first contactless meal delivery box was installed in Zhao-Feng World Trade Building. In March, Deep Blue Technology’s AI mobile retailing food market was installed in communities for the first time. The Huayang Road Sub-district Chamber of Commerce actively serves these two enterprises from AI and “Internet+ Life Service” sectors and helped enterprises effectively control risks in the epidemic period.


Long Wei said that one of the key points of this mechanism is to launch targeted products and services for small and medium-sized enterprises through government support, intermediation of chamber of commerce and assistance from financial institutions and banks. These measures help enterprises supplement capital chain, get through temporary period of difficulties, pay salary to employees and rents on time, so as to maintain business operation until the epidemic period comes to an end and overseas orders resume.


In February this year, Changning became the first district in the city that issued a “joint proposal” to financial institutions and helped enterprises under the negative impact of COVID-19 epidemic to resume normal capital operation through 5 supportive measures, such as green channel for payment and settlement, credit policy support and comprehensive financial service. So far, Changning has distributed RMB4.6 billion of loans to key enterprises in the district. Meanwhile, Changning District helped Shanghai Hongbaoshi Road Business Department of Ping’an Securities Co., Ltd. complete procedures of business registration, introduced investment enterprises to settle in the district, e.g. Donghang Shenhong Equity Investment Management Co., Ltd. and Beiling Health Management (Shanghai) Co., Ltd., contacted with Shanghai Municipal Finance Bureau and Changning District Market Supervision Bureau for making regular, institutional channels of examination and approval for investment companies, and continued to encourage investment companies to settle in Changning.


According to Zhang Yuan, director of the Changning District Investment Promotion Office (the Finance Office), this cooperation mechanism will extend the foundation of financial service chain being established in the epidemic period. The district investment promotion office (the finance office) will strengthen cooperation with the district finance bureau. Shanghai will expand the scale of policy-based financing guarantee funds for small and medium-sized enterprises from RMB5 billion to RMB10 billion. Changning will take this opportunity to strengthen cooperation between guarantee funds and banks, enrich types of loans for enterprises and continue to give credit enhancement support to small and medium-sized enterprises while helping banks to control risks.

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