OnFebruary7,DongguanreleasedSeveral Measures on Supporting Dongguan Enterprises in Weathering the Difficulties and Winning the Battle Against the Epidemic (hereinafter referred to as “Measures”) in an effort to support manufacturing enterprises in resuming work and production and to ensure labor support.
TheMeasuresincludes15policies(referredtoas“15policiestoassistandsupportenterprises”)and55specificmeasures.Amongthem,40measuresareimplementedinDongguanforthefirsttimeand15measuresareoptimizationofexistingones.
TheMeasuresinvolvesshort-termmeasureshighlyconcernedbyenterprisesagainstthebackdropofthecoronavirusoutbreaksuchasworkandproductionresumption,outbreakpreventionandcontrol,andcostsreduction.Medium-,andlong-termsupportingmeasuresarealsocovered,suchasgrabbingorders,stimulatingconsumptionandimprovingservices.
Policy background
Sincetheoutbreakofthecoronavirus,accordingtotheworkdeploymentofthecentralandprovincialgovernmentsandtheinstructionof“launching,reservingandpreparing”,DongguanCPCMunicipalCommitteeandGovernment,attheendofJanuary,hadconductedworkindraftingcomprehensivepoliciesandmeasuresonsupportingenterprisesindealingwiththeinfluenceoftheoutbreak.TheMunicipalCommitteeandGovernmentvisitedenterprisestocollectopinionsandsuggestionsonsuchaspectsasresumptionofworkandproduction,reductionoffeesandburdens,andemploymentandrecruitment.TheMunicipalCommitteeandGovernmentalsosystematicallystudiedtherecentlylaunchedpoliciesonsupportingenterprisesbythecountry,provinceandothercities,andabsorbedandtransferredaccordingtoDongguan’srealities.Onsuchbasis,the“SeveralMeasuresonSupportingDongguanEnterprisesinWeatheringtheDifficultiesandWinningtheBattleAgainsttheEpidemic”wasformulated.Inaddition,Dongguanisalsoworkingonlong-termpolicyreserveforhigh-qualitydevelopmenttomaximumlymitigatenegativeeffectsoftheoutbreakoneconomyandcreatepositiveconditionsforrecoveryanddevelopmentofrelevantindustries.
1. Support stable employment and production resumption of enterprises
nGreater support will be extended to ensure stable employment. For enterprises joining the social insurance scheme, 50% of the actual amounts of unemployment insurance premiums they made in the preceding year may be refunded, provided that they do not lay off employees or reduce staff members only on a small scale. Concerning those temporarily haunted by production and business difficulties but expected to recover and not to lay off employees or reduce staff members only on a small scale, the refund standard may be determined based on the local monthly per capita unemployment insurance premiums and the number of employees joining the social insurance scheme in the preceding six months or 50% of the social insurance premiums payable by enterprises and their employees in the preceding six months. The actual implementation follows the instruction of the province and state.
nSpecial support of RMB 300,000 at the maximum will be given to human resources agencies helping to resolve enterprises’ recruitment difficulties.
nEnterprise are encouraged to resume work and production according to the principle of immediate resumption of qualified enterprises. Governments at city and township levels take care of the verification and reporting processes and assist in allocating medical supplies. Prioritized support will be given to key enterprises and enterprises under the Multiplication Program that possess adequate orders, sound measures on prevention and control, sufficient staff, facilities and materials, and effective internal management.
nSpecial commissioners of science and technology and of labor services will be assigned to key enterprises to provide guidance on smooth and efficient work and production resumption.
2. Reduce enterprises’ burden on joining the social insurance scheme
nEnterprises, struck by the outbreak and failing to timely pay staff endowment insurance, unemployment insurance, medical insurance (maternity insurance included), employment injury insurance, and housing provident fund, can delay the payment within three months following the removal of the outbreak. During this period, no belated payment will be imposed and the rights and interests of the insured employees will not be affected.
nReduction of rates of unemployment insurance, employment injury insurance, medical insurance and housing provident fund will be continued to implement in a phased manner.
3. Reduce enterprises’ burden on rent
nEnterprises enjoy two-month rent free if they rent the properties under the administration of public institutions and state-owned enterprises of the city and the properties of the towns (districts, industrial parks); 50% reduction of rent for two months of the collective properties are coordinated in the villages (communities); industrial parks, business districts, commercial complex, factories and owners of residential properties are encouraged to reduce rent. Prioritized support will be extended to technology enterprise incubators offering rent reduction and exemption to start-ups during the outbreak.
n “Middlemen landlords” of the properties owned by the city, towns (districts, industrial parks) and villages (communities) are supervised to offer rent reduction to tenants so as to benefit the real economy.
nStandards for shared public area of industrial factories and water and electricity fees must be stringently implemented to contain rise of rent in any form.
nTip-off mechanism will be introduced to intensify crackdown on “middlemen landlords” who withhold profits. They will face reduced tenancy, null contract and appearance on the warning list of credit risk on transaction platforms. They will be forbidden to tender for rent transfer of collective industrial factories of the city, towns (districts, industrial parks) and villages (communities).
4. Reduce enterprises’ burden on tax
nTaxpayers, who suffer significant loss due to the outbreak and having difficulties paying tax on urban land use and tax on house property, should enjoy reduction or exemption with the approval of the tax authorities.
nDue to major changes in production and operation resulting from the outbreak, taxpayers following verification collection of income tax can apply for adjustment of verification amount according to law.
nQualified R&D institutes manufacturing drugs, testing kits and vaccines will enjoy prioritized tax refund of their domestic equipment purchase.
nFor enterprises in areas such as culture tourism, catering, accommodation, wholesale and retail, their direct losses or added costs of prevention and control during the outbreak can be incorporated into cost effectiveness.
nFor enterprises manufacturing supplies for outbreak prevention and control and expanding capacity by purchasing equipment, they are entitled to one-off pre-tax deductions and full refund of excess input value-added tax during the course; taxpayers also enjoy exemption of value-added tax for their income achieved through transport of major medical supplies and daily necessities for outbreak prevention and control and for their income acquired by providing public transport services, life services and delivery services of daily necessities.
nFor small and medium-sized enterprises having difficulties handling application during the outbreak, they can delay application according to law; enterprises having special difficulties paying taxes on time can apply for delayed tax payment of no more than three months.
nThe term of carry-over can be extended from 5 years to 8 years for the losses induced in 2020 of the enterprises from hard-hit industries such as transport, catering, accommodation, and tourism (travel agencies and related services and management of scenic spots).
nThe non-profit donations made by enterprises during the epidemic are entitled to full deduction of taxable income.
5. Reduce enterprises’ burden on fees
nNo registration fee will be imposed on drugs and medical equipment for the outbreak and greater support will be given to research and development of drugs and vaccines according to requirements of the province.
nRefund of 80% of travel service quality assurance fund to travel agencies will be put in place.
nFor enterprises from the hard-hit industries such as manufacturing, wholesale and retail, hotel, catering, business and residential services, culture, sports and tourism, transport and convention fail to catch up with their payment of electricity and water, they will not be cut off supply and are allowed to make up and delay payment.
nEfforts will be made to remove behaviors of higher fees charged on transfer users by managers of industrial factories, industrial parks, commercial complexes, office buildings, and residential properties paying stipulated electricity price of the state so as to ensure implementation of policies related to price of electricity.
6. Support enterprise participation in government procurement
nPurchase by government departments of goods, engineering and services for prevention and control of the outbreak can be exempt from the manners and procedures stipulated in government purchase law and approval is not needed for the imported supplies.
nMicro, small, and medium-sized enterprises are encouraged to participate in government procurement and offer procurement documents.
nWhen signing a government procurement contract, the procurement unit is allowed to finish a down payment of no less than 50% with the compliance risks being under control and the accumulated payment should not exceed three times.
7. Support enterprises’ active market expansion
nEnterprises building market expansion center overseas and meeting certain requirements are entitle to one-off subsidy worth of RMB one million for each project; annual subsidy worth of RMB one million will be provided for Made in Dongguan display center set up outside Guangdong province; enterprises attending relevant fairs can receive 50% subsidies for booth fees and decoration fees with the maximum subsidy worth of RMB 100,000 to each enterprise at the same fair.
nThreshold of export credit insurance will be lowered with the subsidy of premium being adjusted from 20% to as high as 50%. Each enterprise can receive maximum annual payment of RMB one million.
nInsurance agencies will be coordinated to first process loss notice of enterprises suffering losses due to the epidemic. Responsibility boundaries will be delineated with flexibility and compensation will be made to the largest possible extent.
nAdjustment of tariffs on imported goods will be implemented and new forms of businesses such as cross-border e-commerce are encouraged to expand markets such as imported consumer goods and medical supplies.
8. Support enterprises in producing key medical supplies
nConvenient access to approval is provided for enterprises dealing with products for prevention and control of the outbreak. Prioritized, tailored, instant and on-door services are offered.
nFor enterprises transforming technologies to increase capacity for supplies needed for prevent and control or shifting in production for such supplies, they are entitled to certain rewards for the equipment they purchased according to relevant policies.
nEfforts will be made to nurture and develop local industry of face mask manufacturing equipment. Reward worth of RMB 80,000/set of automatic mask folding machine and RMB 50,000/set of automatic blank machine will be given to the relevant manufacturing enterprise. For mask machine of other types, a subsidy of 5% of the price will be awarded. The maximum subsidy each enterprise receives is no more than RMB 3 million.
9. Coordinate and stimulate consumption
nThe city and towns (districts, industrial parks) collaborate to set up special fund worth of no less than RMB 50 million to boost consumption. Organization, collaboration and systematic planning will be done and major festivities such as the Labor Day Holliday and Dragon Boat Festival and e-commerce promotions will be utilized. Various resources and strengths will be integrated with industries such as wholesale and retail, accommodation and catering, culture and sports, tourism, fair and convention, logistics and real estate being coordinated. Cross retail, alliance of different industries and other measures will be employed to conduct consumption promotion activities on a regular basis and present rich and vigorous consumption drive.
10. Increase enterprises lending quota
nMonetary policy tools such as relending and rediscount will be leveraged to encourage financial institutions to increase their credit extension. Special relending policy of the People’s Bank of China should be used and banks are encouraged to provide loans with favorable interest rates for key enterprises including micro and small enterprises dealing with production, transport and sale of major medical supplies and daily necessities. Fiscal interest subsidies will be extended accordingly.
nLocal corporate banking institutions (township banks excluded) are encouraged to reserve a credit extension worth of RMB 20 billion for high-quality enterprises hit by the epidemic and provide smooth access to approval. Compared to the financing costs of the same period over last year, the overall loan rate is down by 10% and the scale of the loan extended to industries hit significantly by the epidemic increases by over 10%.
nThe re-loan worth of RMB 2 billion provided by policy banks to local corporate banking institutions should be fully leveraged to meet the loan needs of enterprises suffering heavy blow from the outbreak.
nBanking institutions should not reduce and rescind their loans to enterprises with prospects but haunted temporarily by operational difficulties due to the outbreak.
nBranches of large state-owned banks, joint-stock banks and foreign-invested banks in Dongguan are encouraged to apply for more credit line and faster approval from their superior banks. Increased credit extension should be given to key enterprises and micro and small enterprises hit hard by the epidemic to ensure that the credit balance of the city’s micro and small enterprises remain at a level no lower than that of 2019.
nCity-level policy guarantee companies reduce or cancel requirements for counter guarantee and the guarantee rate for new financing should not exceed 1%. Relevant services should be incorporated into the special fund for development of the city’s financing guarantee industry.
11. Optimize services for re-loan and loan renewal
nThe leading role of policy banks should be given to full play to meet the financing needs of prevention and control of the epidemic.
nThe special support fund for re-loaning for Dongguan enterprises should be utilized, which has totally provided local enterprises with re-loan support worth of no less than RMB 3 billion. For enterprises applying for the special support fund for re-loan, they will pay 50% less interest rate than the rate of the newly extended re-loan.
nThe policy of renewing loans without repayment of principal is promoted. For micro and small enterprises with due working capital loans and seeking financing, loan investigation and review should be conducted in advance so as to shorten the capital renewal gap. Discharge and repledge of the real estate involved in re-loan should be handled simultaneously with the time required for approval being reduced to within three working days.
12. Broaden enterprise loan risk compensation
nSpecial fund for risk compensation should be used adequately and more enterprises such as enterprises manufacturing emergency supplies should be added to the whitelist. Fiscal department at the township (district) level should grant risk compensation to pilot banks provided bad debts occurred from loans extended to the whitelist enterprises.
nNew round of supportive policies for a new round of financial leasing should be implemented. For bad debts occurred from financial leasing provided to local enterprises, certain risk compensation according to the loss will be extended.
13. Strength legal services to related enterprises
nPublic legal service response mechanism will be established and special legal service teams targeted at enterprises will be organized to provide legal services for enterprises facing disputes in aspects such as contract fulfillment and labor relationship resulting from the epidemic.
nAffected by the outbreak, enterprises that fail to fulfill the international trade contract on time can apply for proof of force majeure for free to reduce loss; special access is provided for enterprises delaying tender of major projects overseas or other emergencies to obtain certificate of origin, commercial certificate and consular legalization more quickly to ensure smooth customs clearance of goods, exchange settlement and overseas tender.
14. Strengthen comprehensive service guarantee
nSpecial support fund for enterprises should be put in place and at least 30% of the fund should be appropriated by the end of March. Enterprises are encouraged to apply for the fund with specific policy standards, designated enterprise projects and under the annual budget of 2020 and approval of such fund should be accelerated.
nAffected by the force majeure of the outbreak, enterprises’ record of general administrative punishments will not be published on the platform of Credit China. Credit renovation is also provided to help enterprises restore credit.
nProcedures for renewing property right of the industries as historical remains and public supporting buildings are expedited to assist enterprises in revitalizing idle assets and low-efficient room.
nEfficiency of approval is increased by strengthening collaboration between the center for housing provident fund and the bank. Connected services of housing provident fund, bank mortgage loan and pledge of real estate are realized. Online transaction system of real estate is involved to realize real-time exchange of data and online processing.
nGuidance and coordination of state-owned enterprises of the city in project outsourcing and construction, raw materials purchase, payment settlement, support for financial leasing and favorable rent of apartment for high-level talents are provided. Greater support is given to small and medium-sized enterprises on the industrial chain.
nBusiness associations are supported in establishing various public service platforms to provide members with financial, information, legal, technology and talent services.
15. Implement overlapping policy support
nEnterprises are entitled to the preferential policies launched by the superior government and department during the battle against the coronavirus outbreak together with the existing policies. For the policies released by the government at a higher level that require supporting policies from the city, the supporting policies will be launched accordingly.
nTowns (districts, industrial parks) are urged to unveil preferential policies and supportive measures for enterprises by taking into account the realities and seeking practical results.
Source: Dongguan Daily
