At this point everyone should know about the novel coronavirus epidemic that has been weighing heavy over China, and in certain areas throughout the rest of the world. The outbreak which began in late December 2019 has become widely known to the public from early January 2020.

While the worst of the epidemic seems to be over health-wise, the effects on China’s (and the world’s) economy have just began to materialize.

In response, the Chinese Government has rushed to present reforms and policies to aid enterprises doing business in China, especially those that have a role in preventing the further spread of the epidemic, as well as a fast and smooth resolution of the outbreak.

Many provinces have introduced countermeasures to help companies fight “the epidemic war” with the Government of Shanghai particularly active. We shall present the most relevant policies below:

1. Reductions in Social Contributions: In 2020, Shanghai Gov will return 50% of the total unemployment insurance premiums actually paid in the previous year to qualified employers that do not lay-off employees/minimize lay-offs.

2. Postponing the Adjustment of the Social Security Payment Base: The adjustment of social contributions’ base will happen from July 1, with a postponement of 3 months.

3. The Social Insurance Payment Period can be extended: Residents who fail to complete registration and payment of social insurance premiums on time are allowed to reapply after the epidemic. No late fee will be applied if the application is done within 3 months after the outbreak.

4. Implementation of a subsidy policy for training fees: For enterprises that, during the suspension period, allow their employees to participate to online training or other special training organized by local education institutions, a subsidy of up to 95% of the training costs may be granted.

5. Enterprises playing Key Roles in Epidemic Prevention: These companies shall receive VAT exemptions, easier access to loans (and with lower interests), easier access to SSE (Shanghai Stock Exchange) for alternative ways of financing, subsidies for R&D activities and up to 80% of a refund of total costs incurred in technology upgrading, import duties and import-linked value-added tax and consumption tax exemptions when importing relevant material & faster custom clearance.

6. Rent Reduction / Exemption: SMEs renting non-residential properties from Shanghai-based state-owned enterprises will have their rent for February and March waived. Large-scale commercial buildings, shopping malls, industrial parks and other market operators are encouraged to reduce rental for tenants physically operating in the buildings.

7. Delay in tax filing: Taxpayers who have difficulties in making timely tax payment due to the epidemic and who meet the conditions for delay in payment shall be permitted to defer payment in accordance with the relevant laws and regulations for a maximum period of 3 months.

8. General Tax Incentives: Enterprises in hard-hit sectors may extend the carry-forward period of annual losses in 2020 from a maximum of 5 to 8 years. Goods donated are exempted from VAT, consumption tax as well as additional taxes and fees. Medical workers and disease control professionals who have participated in the epidemic prevention and control shall be exempted from individual income tax on stipend and bonuses.

9. Bank Support: Shanghai Pudong Development Bank, Bank of Shanghai, and Shanghai Rural Commercial Bank are encouraged to lend more and to extend more credit to businesses that are on the frontier of combating the epidemic, businesses in hard-hit sectors as well as SMEs. Other financial institutions in Shanghai are also encouraged to do the same.

Efforts will be made to increase credit and loan support to enterprises from the hardest-hit industries. Enterprises with difficulties in repaying due loans will be supported by modifying the repayment schedule, extending the repayment period and renewing loans without the principal being repaid.

10. Reduction of employee’s medical insurance premium rate: For 2020 a reduction of 0.5% will be applied to payments of employee’s medical insurance.

11. Cultivation and support to the development of new technologies, new models and new forms of businesses: SMEs will be given stronger support by way of sci-tech innovation e-coupons; quota cap for sci-tech innovation coupons handled in 2020 is to be increased from 300,000RMB to 500,000RMB. Telecom operators are encouraged to provide free cloud-based office services for more than 6 months, such as on-line video conference to SMEs seriously affected by the epidemic.

12. Improvement of corporate credit repair mechanisms: Shanghai will actively assist enterprises in the remedying of their corporate credit affected by the epidemic. Enterprises who suffer credit damage due to delay in delivery, loan repayment and contract fulfillment incurred by their participation in the anti-epidemic work will not be recorded in the credit blacklist.

Further verifications are needed to fully understand all of these measures, in particular who can be deemed eligible, for which period, and how to access the subsidies.

Upon our examination, we can also confirm that similar policies apply in Beijing, Jiangsu Province (Suzhou, Taizhou, Yancheng), Zhejiang Province (Jiaxing, Hangzhou, Huzhou, Ningbo), Shandong Province, Fujian Province (Fuzhou, Quanzhou) & Jiangxi Province.

The Local, as well as the Central Government are working tirelessly to ensure a smooth and quick resolution of the current epidemic, as well as to ensure support to enterprises doing business in China. On our side, we can hope for a fast resolution of this situation and, above all else, STAY STRONG!