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Policies to support MSMEs getting back from covid-19 epidemic

With the covid-19 epidemic for now being under control in China the focus turns to getting the economy, which has taken a severe beating during the outbreak, back on track. Stimulus measures totaling 34 trillion RMB focusing on infrastructure development in 13 provinces and cities have so far been announced, and banks are lowering lending rates to boost consumer confidence.

At the same time many fiscal measures are being introduced to ease the effects felt from the epidemic by micro, small and medium-sized enterprises (MSMEs). The State Council have made it clear that Chinese and foreign-funded enterprises will be treated on an equal footing concerning such policy measures. With more than 90% of the 400,000+ foreign-funded enterprises in China being MSMEs, a vast majority of foreign-funded enterprises in China can expect to one able to take advantage of these policies.

Here we summarize some examples of supportive measures being implement in Hangzhou and Shanghai.


  1. Financial costs of MSMEs are to be eased by reducing the interest rate of company loans by 0.5% as compared to the previous year. Financial institutions giving preferential treatment to MSEMs will be supported by the Hangzhou government though a 50% subsidy of their actual cost for doing so during a period of two months.

  2. All credit guarantee institutions in the city are exempt from credit guarantee fees for financing guarantee services to MSMEs for two months. For non-state-owned guarantee institutions that are exempt from guarantee fees, the government will grant two-month subsidies according to the state-owned policy guarantee standard rate.

  3. Enterprise rent subsidies; rental fees for February and March will be waived for enterprises and industries that rent government-owned space (city level and below).

  4. Property management companies participating in epidemic prevention and control can be awarded grant subsidies from the government to the equivalent of 0.5 RMB/sq.m. of the area under management.

  5. Individual rent subsidies; company employees paying social insurance, whose annual salary in 2019 was below 72,000 RMB and who do not rent public housing or receive government rent subsidies, will be awarded a 500 RMB rent subsidy.


  1. Enterprise rent subsidies; MSMEs renting space from state-owned enterprises (incl. all types of development zones, industry & business parks, incubators and science parks) will be exempted from paying the rent in February and March.

  2. Tax exemptions; enterprises and industrial companies that regularly pay fixed/quota taxes will be exempted during the epidemic prevention and control period.

  3. Continued work on implementation of unemployment insurance policy. In 2020, the Shanghai government will reimburse 50% of actual insurance premiums paid by employers and employees during the previous year.

  4. Delay of social insurance contributions; from 2020 the start and end date of for social insurance payments (incl. medical insurance) will be adjusted to July 1 to June 30 the following year, i.e. postponed by 3 months. The social insurance payment year for 2019 will similarly be postponed to July 1, 2020.

  5. Enterprises unable to fulfill international trade contracts, or has the fulfillment of such postponed, as a result of the covid-19 epidemic will be issued a certificate of force majeure by the Shanghai office of the China Council for the Promotion of International Trade (CCPIT).

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