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Companies welcome new financial policies and fee reductions

An employee works on the production line at a factory in Shanghai on April 29, 2022. [Photo/Xinhua]

Shanghai Sansi Electronic Engineering Co, a leading LED display and lighting company, is known for a number of sophisticated projects, including high-resolution outdoor LED displays in Times Square, New York.

In November 2020, the company was recognized by the Ministry of Industry and Information Technology as a “small giant company”, indicating its special role in a niche sector, its high market share and its capacity of innovation.

The company’s headquarters, located in the Minhang district of central Shanghai, carries out most of the research and development work with a team of 900 people. Following the city’s lockdown, which was introduced last month, the head office has managed to maintain operations with 200 employees.

Company chairman Chen Ming said logistics have become the biggest headache. “Freight costs have risen sharply, but we still make export deliveries regardless of the cost,” Chen said.

The manufacturing has taken a lot of delay, because the raw materials cannot be delivered on time.

“Project execution has been significantly affected, as well as the company’s capital flows, as revenue fell by 50 percent in March and April,” Chen said.

However, production at the company’s factories in Jiashan and Jinhua, Zhejiang Province, was unaffected by the latest COVID-19 outbreak.

Chen said that since infrastructure will be a major driver of China’s economic growth this year, many LED lighting projects for highways will be announced as soon as the pandemic is contained. He added that the company has seen orders rebound in Europe and the United States.

However, as it still has to pay employee salaries at a time when its revenues are being hit hard by delayed cash inflows, the company is still under severe financial pressure. Chen suggested that more favorable bank loans be offered to small and medium-sized enterprises, or SMEs, to overcome their current difficulties.

Shanghai Chengfang Property Co, which specializes in construction and property management, has faced such challenges.

The company runs more than 10 industrial parks and office buildings in Shanghai, and many of its tenants are smaller startups. Chengfang chairman Cheng Zhihai said that since the beginning of this month, more than 20 of these tenants have terminated their leases because they cannot pay the rent.

“I fully understand their decision. Their income has been significantly affected over the past two months, but they still have to pay employee salaries, loan interest and rent. The burden is enormous,” he said. he declares.

All of the company’s 1,400 employees, mostly construction staff, have not worked since March 11.

The bills are piling up and in addition to providing workers’ basic salaries, Chengfang is responsible for their housing, three meals a day and disinfection work.

Cheng, who is also deputy director of the Zhejiang Chamber of Commerce in Shanghai, said more flexible use of unemployment insurance would help the company and many others in the real estate sector deal with their current difficulties. .

While companies pay unemployment insurance for their employees according to laws and regulations, this coverage can only be redeemed when an employee is out of work, which must be proven by a breach of contract.

Although the contracts of the construction workers at Shanghai Chengfang Property Co are still in effect, these employees have been classified as unemployed for at least two months.

If unemployment insurance could be reimbursed at such an urgent time, the burden on many SMEs would be greatly eased, Cheng said.

“The government has announced a series of favorable financial policies over the past few weeks, targeting SMEs in particular. We look forward to the rapid implementation of these policies,” he said.

At a press conference on May 8, Guan Xiaojun, deputy director of the Shanghai Municipal Financial Regulatory Bureau, said more inclusive financial policies would be offered to SMEs and further fee reductions were planned. Meanwhile, these companies in Shanghai are allowed to provide loans without paying the principal, he said.

Late last month, the State Council announced that restaurants, retailers, travel agencies, civil aviation and transportation service providers could suspend pension insurance premium payments in the second quarter. .