Market News International:
How many SOEs have received low-interest loans? Some local state-owned assets supervision and administration commissions have encouraged SOEs to support each other in financing activities such as loans and guarantees. Could you please provide more information on this issue?
Xia Qingfeng:
During the fight against the epidemic, we have worked hard to capture a complete picture of the policies issued by local state-owned assets supervision and administration commissions. At present, more than 20 local commissions have issued policies to support and guide SOEs in fighting the epidemic. These policies cover areas including performance evaluation, budget management and investment management. We combed these policies and realized that a few local commissions had indeed formulated policies to encourage SOEs to strengthen cooperation in financing, which has played a positive role in curbing the impact of the epidemic. We have carefully studied these financing policies. Financing guarantees are common business practice in enterprise operation and development. Relevant decision-making and approval processes are also clearly stipulated in rules and regulations concerning state-owned assets supervision and administration. When enterprises face difficulties in operation and financing due to the epidemic, local state-owned assets supervision and administration commissions will guide their recovery in accordance with laws and regulations.
Today, the fight against the epidemic calls on people from all walks of life, regardless of age, gender or place of residence, and all enterprises, regardless of ownership, to join. We are all suffering the same storm and working together to overcome the difficult time. Relevant government departments have introduced a series of fiscal, taxation and financial policies including the low-interest loans you mentioned to further reduce enterprises’ production, operation and financing costs and better guarantee epidemic prevention supplies and medical supplies. These policies are for all enterprises — none targets only SOEs. The prevention and control of the COVID-19 outbreak is currently at a crucial stage. Qualified SOEs should apply for financial support through open channels in accordance with relevant rules and regulations. No one will get privileged treatment.
We also noticed that some new policies are designed to specifically support small and medium-sized enterprises (SMEs) such as a 20-clause document issued by China’s Ministry of Industry and Information Technology. SMEs are more vulnerable to the epidemic. It is understandable that we should support and help them. Centrally administered SOEs will take the lead in actively implementing relevant policies in realms like industrial chain cooperation. Thank you.
Peng Huagang:
I have something to add. Your question also touched upon the cooperation among enterprises. The epidemic has caused difficulties for all enterprises in terms of production and operation. And it is the very time for us to work together to get through the crisis. As we mentioned just now, there are some cooperation among SOEs. But more importantly, in the process of implementing national supportive policies for SMEs, centrally administered SOEs have done a lot of work to promote cooperation through the industrial chain, especially in terms of guaranteeing basic supply.
First, as for basic supply guarantee, as Mr. Ren just mentioned, centrally administered SOEs in the fields of power, gas and communications have continued to ensure the supply of non-stop energy and telecommunications service to SMEs in arrears. In addition to aforesaid measures, some centrally administered SOEs have even launched specific preferential policies targeting companies through the industrial chain. For example, China Telecom has introduced 20 assistance measures for channel agents and terminal vendors to help its partners resume production and operation as soon as possible.
Second, we have actively enhanced business support. Centrally administered SOEs often stay at the critical link of the whole industrial chain, so their resumption of work and production, to some extent, will drive enterprises in both the upper and lower reaches of the industrial chain to resume operation and production. For example, SGCC has resumed a batch of large construction projects totaling 70 billion yuan (about US$10.01 billion), which are expected to motivate both upstream and downstream industries to resume work and production better and sooner.
Third, centrally administered SOEs have actively helped other enterprises overcome difficulty in cash flow. For example, the Optics Valley industrial park under China Electronics Corporation (CEC) reduces part of the rents and service fees for the property company owned by the industrial park along with micro, small and medium enterprises. The reduced fees are expected to exceed 20 million yuan (about US$2.86 million). At the same time, CEC strengthens financial support for micro, small and medium enterprises in the industrial park. Centrally administered SOEs like China Resources Group, China Poly Group Corporation Ltd. and China Merchants Group have reduced rents of their shopping malls and commercial entities during the Spring Festival period. The rent cut by CR Vanguard alone has reached 130 million yuan (about US$18.59 million), benefiting 14,000 commercial tenants. The Sanya International Duty-Free Shopping Complex under China Tourism Group has exempted all the rents and property fees of its tenants until the shopping complex formally resumes business, as part of the effort to help vendors overcome the short-term business difficulties.
Another important aspect is to properly handle legal disputes with SMEs. The epidemic has led some SMEs to delay delivery of their orders and payments. SASAC encourages centrally administered SOEs to strengthen communication with such enterprises in a timely and proactive manner based on the principles of overcoming difficulty together and friendly consultations. In accordance with laws and regulations, we will seek to solve the difficulties and problems of SMEs by allowing them to delay the performance of contractual obligations or modifying some contract terms, trying our best to help them reduce losses or avoid the expansion of losses. At the same time, we will jointly explore countermeasures, plan long-term cooperation, and strive to make due contributions to maintaining the stable operation of the economy. Thank you.
