100 FAQs about Shanghai’s 28 Policy Measures to Combat the Epidemic and to support businesses
On February 7th, Shanghai Municipal People’s Government issued the <Policy Measures of Shanghai Municipal People’s Government on Effective Prevention and Control of the Epidemic as well as Support for the Steady and Healthy Operation of Enterprises>(referred to Shanghai’s 28 Policy Measures hereinafter). Currently, quite a number of detailed implementation plans referencing provisions in the document have been announced and entered into the implementation phase. These measures have been very instrumental for the business community’s fight against the epidemic.
Given the enterprises’ keen interest in learning about the implementation of these measures on the ground, The CBN have, in collaboration with Jiemian.com , reached out and collected many issues and questions of the businesses’ concern. Departments of Shanghai Municipal People’s Government, such as Shanghai Development and Reform Commission, Shanghai Municipal Commission of Economy and Informatization, Shanghai Municipal Finance Bureau, Shanghai Municipal Tax Service, Shanghai Civil Affairs Bureau, Shanghai Municipal Commission of Commerce, Shanghai Municipal Commission of Science and Technology, Shanghai Municipal State-owned Asset Supervision and Administration Commission, Shanghai Municipal Financial Regulatory Bureau, Shanghai Municipal Administration of Culture and Tourism, the People’s Bank of China Shanghai Head Office as well as China Banking and Insurance Regulatory Commission Shanghai Bureau were interviewed for official interpretations. The compellation of 100 FAQs about Shanghai’s 28 Policy Measures to Combat the Epidemic and to Support Businesses was based on the responses and official documents of the aforementioned line departments.
It is our hope that this reductive presentation form of Q&As could help businesses better understand those policy measures and better navigate through the epidemic period with orderly resumption as well as stable and healthy development.
I. Support for Enterprises to Navigate Through the Epidemic
1. Which companies are “enterprises playing key roles in the epidemic prevention and control”?
A: The official name list is jointly produced by the NDRC and MIIT, which will include companies certified by Provincial People’s Governments and filed at NDRC and MIIT.
2. Our company produces and sells key prevention supplies and we anticipate big excess inventory after the epidemic. According to Shanghai’s 28 Policy Measures, these excess inventories could either be underwritten by the government or be taken over as governmental reserves. Can we count on the government for implementation on the ground?
A: The Shanghai Municipal Leadership Group on the Work of COVID 19 Prevention and Control is responsible for the certification of supplies being requisitioned, imported and produced for the fight against COVID 19. In case of excess in these supplies which proved difficult to sell by the companies, the excess, after evaluation by relevant authorities, will be taken over by Shanghai municipality and dealt with through the local reserve system.
Relevant rules and processes are being drafted. The implementation will be initiated when the epidemic prevention and control completes.
3. Our company has imported masks which are directly donated to the civil affairs bureau and organizations designated by the bureau to combat the epidemic. Are the masks entitled to the tax exemption policy for imported supplies for epidemic prevention and control?
A: A notice was jointly issued by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, specifying a moderate extension of tax exemption coverage of the Interim Measures to Exempt Charitable Donations from Import Duties to ①reagents, disinfectants, protective wears, ambulance, epidemic prevention vehicle, mobile disinfection unit and mobile command truck. Coverage was also extended to ②Goods that are donated directly after import from overseas/Special Customs Areas by government department, QUANGOs, businesses, civil societies, individuals, foreign citizens in or coming to China. Export Processing Companies are included as eligible donors. ③Provincial level Civil Affairs authorities and their designated organizations are included as donation receivers. The validity period of this notice is from January 1st 2020 to March 31st 2020.
Qualified donations will be exempted from import duty as well as import-linked VAT and consumption tax.
4. Our company’s main business is international trade. Upon receiving the emergency order from Shanghai Municipal Health Commission, we started to import large quantity of supplies for epidemic prevention and control. Is our company a beneficiary of the import duty exemption policy?
A: According to the notice jointly issued by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, from January 1st 2020 to March 31st 2020, the policy covers imports which are organized by health authorities and are directly used for epidemic prevention and control. The imported goods has to fall into one of the following categories to be eligible for the policy: reagents, disinfectants, protective wears, ambulance, epidemic prevention vehicle, mobile disinfection unit, mobile command truck as well as goods specified by the Interim Measures to Exempt Charitable Donations from Import Duties. The fiscal authorities, together with the health authorities, will be producing a list of eligible importers and a list of eligible goods, which will be given to local customs and tax authorities through official communication.
If your company and the imported goods are both in the lists, you will benefit from the import duty exemption policy.
5. How to process formalities for eligible duty-free imports?
A: According to the notice jointly issued by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, qualified imports declared between January 1st 2020 and March 31st 2020 can be released after registration with necessary formalities for duty exemption being processed afterwards. Regarding duties that are already paid for goods qualified according to this policy, importers can file for refund at the customs before September 30th 2020.
For more implementation details, please call Shanghai Customs’ hotline 12360 for further explanation. For inquiries about how to obtain proof for input VAT that’s not deducted, please call tax authority’s hotline 12366.
6. “Registration fees are waived for COVID 19 prevention-related drugs and medical devices.” How is this policy being implemented?
A: Shanghai FDA, in accordance with its purview, will waive registration fees for medical devices’ applications that have entered the emergency approval mechanism and are filed in Shanghai as COVID19-related prevention and control products.
Registration fees for new drug applications that have entered the extraordinary approval procedures and are filed for prevention and treatment of COVID 19 will be waived.
This policy started to take effect on January 1st 2020 and will expire pending further notice from State-level authorities.
7. According to Shanghai’s 28 Policy Measures, support will be given to effort overcoming the obstacles in the R&D and production of innovative products for epidemic prevention and control. How will the Special Project for R&D and Production of Innovations in COVID 19 Diagnosis and Treatment be organized?
A: This special project focuses on supporting the R&D and production of key drugs and equipment for COVID 19 prevention and control. Funding support will kick in after applications are filed. The project encourages innovation and tolerates failures. There are standardized funding support and special funding support. For applications that are less than 1 year into the construction phase and have completed all the necessary registrations or obtained all the necessary production qualifications, a standardized funding support which is up to 30% of the recognized total investment and/or RMB 20 million will be applied. Application without registration or production qualifications will be given a funding support that is up to 10% of the recognized total investment and/or RMB 1 million.
In principal, a maximum of 15 projects will be approved.
The official guidebook for the project can be obtained online and is jointly issued by Shanghai Development and Reform Commission as well as Shanghai Municipal Commission of Economy and Informatization. A third party institution will be entrusted for the digitalized handling of application filings.
8. Are there additional policies for the listing of high tech firms pertinent to the fight against the epidemic?
A: The policy stipulates that high tech companies pertinent to the prevention and control of COVID 19 will be supported and encouraged to list at the Sci-Tech Board of Shanghai Stock Exchange.
Under current laws and regulations, the Shanghai Stock Exchange will reach out to qualified enterprises to navigate them through the listing process and answer their inquiries along the way. Once all the necessary materials are in place, the application will be accepted and dealt with at once. Appraisal professionals who have deep insights into the bio pharmaceutical industry will be organized to expedite the evaluation. The difficulty on the part of IPO issuers and intermediaries are fully considered by deducing the epidemic period from the time limit for issuers to answer inquiries from the SSE.
9. Our company produces supplies to combat the epidemic and we are expanding our capacity. We made an emergency purchase of raw materials in large quantity and reinvented a production line, which generated large amount of overpaid VAT. Can we apply for rebate?
A: Yes! Eligible companies producing key supplies for the epidemic prevention and control can file with tax authorities for full rebate of overpaid VAT on a monthly basis. The company list will be jointly drafted by Shanghai DRC and Shanghai Municipal Commission of Economy and Informatization.
10. Our company purchased a batch of N95 masks in January and donated them to a designated hospital for treat COVID 19 patients. How will the VAT be levied on this batch of donation?
A: VAT can be exempted. Starting from January 1st, organizations and individual industrial and commercial households will be exempted from VAT levy on donations that they produce, process (by consignment) and purchase to charitable organizations, people’s governments of county-level and above, line ministries and agencies as well as designated hospitals for the fight against the epidemic.
11. Our company is a logistics company and we shipped a batch of key prevention and control supplies to the hard-hit area by emergency request from our client. Is there tax incentives for income generated from this deal?
A: Starting from January 1st, income generated from shipping key prevention and control supplies will be exempted from VAT levy. The scope of key supplies is defined by the NDRC and MIIT.
12. Our company produces protective clothing for medical use. During the epidemic, our company was requisitioned and we organized our staff to resume production and to work overtime to produce protective clothing, for which the government will offering subsidies. Should we pay VAT for this fiscal subsidy?
A: No! If the subsidy has no link to sales income or volume, it can not be accounted for as taxable income and therefore is free of VAT levy.
13. Our company produces protective clothing for medical use. To fight the epidemic and answer to the call of the government, our company made a new purchase of production equipment that worth RMB 6 million to expand capacity. Is there any pre-tax deduction policy for this expenditure?
A: For companies producing key supplies for epidemic prevention and control, expenses on new purchase of equipment for capacity expansion can be accounted for as one-off deductible in income tax calculation for the month. Companies with Notice on Emergency Requisition of Capacity issued by Shanghai Municipal Commission of Economy and Informatization are the eligible ones for this policy.
14. Will there be fiscally subsidized interest rate for companies offering products and services for the COVID 19 prevention and control. What are the requirements and how to apply?
There are five categories of businesses are eligible for the loans by financial institutions through POBC’s Special Refinancing Policy: companies producing key prevention and control supplies such as medical protective clothing, effective masks for civil and medical use, goggles for medical use, novel coronavirus detection kit, negative pressure ambulance, disinfection equipment, infrared thermometer, intelligent monitoring and detection system as well as relevant drugs; Upstream companies that produce raw materials, supplementary materials and equipment for the aforementioned supplies; Key companies producing daily necessities; Key companies that store medical supplies; companies providing IT equipment and service systems for fight against the epidemic as well as companies selling and transporting the aforementioned supplies.
A national list and a Shanghai list for businesses fall into the aforementioned categories can be referred to for the arrangement. Central Government-owned Enterprises can petition to the NDRC and MIIT for inclusion into the national list. Shanghai based companies can apply with Shanghai DRC and Municipal Commission of Economy and Informatization.
For companies on these two lists, On top of the discounted loan rate through the PBOC mechanism, half of the interest on the loan will be subsidized by Shanghai’s fiscal authority to make sure that the real interest rate is lower than 1.6%.
In the mean time, extraordinary scenarios and urgent cases are taken into consideration. Eligible companies, while pending approval from financial institutions for credit applications, can file simultaneously at relevant departments for inclusion into the lists.
Companies on the lists, after securing the credit supported by the PBOC, can submit Fiscal Interest Subsidy Application Form and loan contract that becomes effective since January 2020 to Shanghai Municipal Finance Bureau. Once the application is approved, the Finance Bureau will transfer interest subsidy to the company.
II. Effectively Alleviated Burden for all Types of Enterprises
15. Which companies are entitled to rental reduction and exemption?
A: Three key elements: engaging in production and commercial activities, privately-owned and SMEs
SMEs controlled by large group companies are not eligible candidates for this policy.
16. Our business did not engage in a direct leasing contract with the Shanghai SOEs and we have a sublessor. Are we eligible for rental reduction and exemption?
A: Yes. In principle, sublessors are not beneficiaries of this policy. The actual tenants shall provide relevant proofs to their sublessors or the Shanghai SOE landlords.
17. If the SME is renting properties owned by central government-owned enterprises, SOEs based in other localities, private enterprises, foreign-invested enterprises or collective enterprises, will there be rental reduction and exemption?
The organizations mentioned in the question are encouraged to get on board with this policy. It is suggested that the tenants should consult with their landlords for a solution. Currently, two cooperative companies that include Shanghai Supply and Marketing Cooperatives took the initiative and participated in this policy.
18. The property that I rent has a complex shareholding structure which involves non-state-owned small and medium shareholders. Are we eligible for this policy?
A: The defined scope of landlords includes SOEs affiliated with municipal and district-level SASACs as well as their subsidiaries which appear on the balance sheet of the parent companies. Mixed ownership companies that fall into this category shall also implement the policy.
It is suggested that tenants contact companies for details regarding implementation of this policy.
19. For office buildings and industrial parks run by non-state-owned companies, if the landlords take the initiative and reduce or exempt rent for tenants, will there be any subsidy?
A: It is specified in Shanghai’s 28 policy measures that companies taking the initiative to cut rent for tenants, once proved to have difficulty in paying property tax and urban land use tax, can apply for reduction and exemption of these taxes.
20. How to obtain proof for applications of reduction and exemption of property tax and urban land use tax? The applicants include landlords mentioned in question 19 and landlords whose properties are requisitioned for emergency purposes.
A: Companies can make their application through tax authority’s online platform. If all the information is valid, no additional materials will be needed. Shanghai Tax Authority will reach out to relevant department and districts to verify the application and will provide policy interpretation and guidance to ensure implementation on the ground.
21. What if the company’s office and domicile are in different districts? For instance, a company is registered in Changning but the physical office is in a Fengxian’s industrial park.
A: According to this policy, the main proof is the leasing contract. The domicile of tenant is not relevant for the application. For more details regarding procedures and materials required by this policy, tenants are advised to consult with their landlords.
22. Our company is an eligible tenant to this policy and rents an office in a building owned by a district-level SOE. The landlord is still requesting rent being paid in full for it has received any notice from the district administration about this policy. How could we resolve this?
A: Districts and SOEs that have announced their own rental reduction and exemption policies shall reconcile their policies with Shanghai’s 28 policy measures with the 28 policy measures being the minimum standard. They are also encouraged to consult with their tenants to solve the difficulty of tenants.
In case of information mismatch, it is suggested that the tenant should contact district SASAC, which is responsible for the supervision and follow ups.
23. How long will the rental reduction and exemption period last?
A: The rentals for February and March are waived.
For SMEs that still have major difficulty to survive, SOEs can, based on actual situation, provide further support that include additional reduction and exemption as well as postponement of payment.
24. Our Company’s headcounts exceeds the SME’s standard but our businesses are yet to be profitable. Is there possibility for the preconditions of the policy to be moderately relaxed and only granting partial reduction?
A: It is clearly stipulated that this policy is only for SMEs, excluding large scale businesses. If large companies have actual difficulty in their operation, they are encouraged to consult with their landlords to obtain support.
25. Our company runs a motel. We have been almost vacant since the end of January, which significantly dented our revenue. We are now facing huge cost pressure because of labour and other elements. Is there any policy that will provide tax support for us?
A: Starting from January 1st, revenues generated from providing accommodation and catering services by your company are exempted from VAT levy.
26. I represent a courier company. During the epidemic, the daily necessities of citizens vastly depend on deliverymen, which has pushed up cost thus resulted in huge pressure on the company. Is there any supportive tax policy?
A: Starting from January 1st, your corporate income from delivery service for people’s daily necessities is exempted from VAT.
27. I represent a long-distance passenger service company. Due to the impact of the epidemic, the passenger volume witnesses sharp decline. Is there any supportive tax policy?
A：Starting from January 1st, your corporate income from long-distance passenger service and other public transportation service is exempted from VAT.
28. My corporate income during the epidemic period is exempted from VAT according to relevant policies. What procedures should I go through?
A: Taxpayers who are entitled to VAT exemption according to relevant policies can independently apply for tax exemption and retain related credentials for future reference. No extra filing or approval procedures are involved. When declaring VAT exemption, VAT declaration form and detailed statement form for VAT deduction and exemption should be filled in by taxpayers.
29. My company donated 3 million yuan to the epidemic-stricken areas through certain charity foundation of Shanghai, is that fully pre-tax deductible?
A: Yes. Cash and medical supplies donated by companies and individuals through non-profit organizations or people’s governments at and above the county level and other governmental departments, or directly to the hospitals which undertake epidemic prevention and control missions are entitled to full pre-tax deduction when calculating taxable income.
30. My group company purchased masks and disinfectants with a value of 1 million yuan, available for our employees for the purpose of epidemic prevention and control. Is this purchase input subject to deduction? And can this expense be included in the pre-tax deduction of corporate income?
A: Yes. Your corporate expense incurred by purchasing masks, disinfectants among other medical supplies for sake of epidemic prevention and control as well as employee health protection can be included in pre-tax deduction as labor protection expenditure.
31. My company is a coffee shop chain which has been seriously impacted by the epidemic. Is the extension of loss carryover to 8 years applicable for us?
A: Companies in four major categories of industries facing tremendous difficulties caused by the epidemic are entitled to an extension from 5 years to 8 years for the carryover of losses incurred in 2020.
Coffee shops belong to the catering industry, one of the four major categories. If the income from catering service is regarded as the prime operating income and accounts for over 50% of the total income (exclusive of non-taxable income and income from investment), the losses incurred by the impact of the epidemic in 2020 will see a carryover extension from 5 to 8 years.
32. During the epidemic, I consider donating cash and medical supplies. Can I have a 30% deduction from the income when calculating the income tax according to individual income tax law?
A: No, a full deduction will be exercised. Cash and medical supplies donated by individuals through non-profit organizations or people’s governments at and above the county level and other governmental departments are entitled to full deduction when calculating taxable income.
33. Will the donations made by individuals through collective donation channel of the governmental departments be entitled to pre-tax deduction?
A: Yes. Individual donations mobilized by the governmental departments, enterprises and public institutions can be deducted with credentials of collective donation receipt and employee income statement.
34. Are the subsidies and bonuses given to health workers and workers who have participated in the epidemic prevention and control exempted from taxation?
A: yes. Temporary subsidies and bonuses given to medics and workers who have participated in the epidemic prevention and control according to the criteria of government regulations are exempted from individual income tax. The criteria mentioned above include criteria for subsidies and bonuses set by governments at different levels.
35. I’m an ordinary salary earner and have a fixed employer. Is it necessary that my personal donation has to be deducted from my salary when paid on a regular basis by my employer?
A: It is optional. According to the rules, if a resident obtains income from wages and salaries, he or she may choose to deduct it at the advanced payment of withholding or at the time of annual final settlement.
36. During the epidemic, individually-owned businesses that pay fixed amounts of taxes at fixed dates will be lawfully exempted from paying lump-sum taxes. How to apply?
A: It’s an automatic process. No application is needed. To support individually-owned businesses that pay fixed amounts of taxes at fixed dates to restore operation during epidemic prevention and control period, tax authority will lawfully and reasonably reduce the fixed-amount taxes paid by individual businesses who suffer income decline due to the epidemic impact with an aim to reduce their tax burden. To prevent close contact and for the convenience of taxpayers, tax authorities will make unified adjustment.
37. Since there is measure to reduce tax burden for individually-owned businesses, is it possible to introduce additional tax break for the medium, small and micro-sized enterprises?
A: Relevant supportive tax policies have been introduced to support severely impacted industries and companies, including the medium, small and micro-sized enterprises. For small and micro-sized companies, supportive tax policies are as follows:
In terms of VAT, income from providing services, such as public transportation, life service and express delivery service for people’s daily necessities will be exempted from VAT.
In addition, from March 1st to May 31st of 2020, for the small-scale taxpayers in provinces, autonomous regions and municipalities directly under the central government except for Hubei Province, their taxable sales income which was previously levied at tax rate of 3% sees a reduction of value-added tax rate to 1%; pre-paid VAT items which were previously levied at tax rate of 3% are levied at the rate of 1%..
In terms of corporate income tax, at present, companies in four major categories of industries facing tremendous difficulties caused by the epidemic are entitled to an extension from 5 years to 8 years to the maximum for the carryover of losses incurred in 2020. The four major categories include transportation, catering, accommodation and travelling (both travel agency and related service, and scenic spot management). Please refer to the National Industries Classification for detailed criteria. The prime operating income of those companies should account for over 50% of the total income (exclusive of non-taxable income and income from investment) in 2020.
Favorable policy of low- rate corporate income tax is currently applicable for the small and micro-sized companies, meaning that the annual taxable income of a small-scale and low-profit enterprise shall be reduced to 25% of the total if it does not exceed 1 million yuan and the corporate income tax rate shall be 20%; the annual taxable income shall be reduced to 50% of the total if it exceeds 1 million yuan but not surpass 3 million and the corporate income tax rate shall be 20%.
38. The epidemic has brought huge impact on the capital chain of companies whose prime businesses are international tourism and visa processing. How to support those companies and help them survive?
A: Tourism industry bears the brunt of the epidemic during which customer demand for travelling slumps hence results in liquidity squeeze for tourism companies. To this end, Shanghai Municipal Administration of Culture and Tourism issued Several Policies and Measures of Shanghai to Fully Prevent and Control the Epidemic and Support the Steady and Healthy Development of Tourism Companies in a view to help tourism companies to the best of its ability to tide over difficulties.
Firstly, efforts are made to ease the burden on tourism companies. For travel agencies that have paid security deposit according to the law and have acquired travel business license, 80% of its existing deposit will be temporarily refunded and shall be restituted before February 5th, 2022.
As of February 28th, 776 applications have been accepted, among which 772 cases have been examined and verified. 760 cases have been transferred to banks and a total of RMB 320 million has been released. Meanwhile, the temporary refund is ongoing orderly. It is expected to benefit 1400 travel agencies with a total amount of about RMB 500 million.
Secondly, the role of earmarked funds will be brought into full play. Efforts are made to expedite the appropriation of 2019 earmarked fund for tourism and try to start fund appropriation by the end of the first quarter or the beginning of the second quarter for projects that have been appraised. Meanwhile, the application of 2020 tourism special fund will be started as soon as possible with focuses on boosting Shanghai tourism development, elevating the image of Shanghai tourism, improving tourism-related public services and enriching major tourism activities after the epidemic.
Thirdly, financial aid will be enhanced. Efforts are made to help Shanghai culture and tourism companies with access to Shanghai banks with special quota of re-lending, support Shanghai medium, small and micro-sized culture and tourism companies to solve financial difficulties and increase their liquidities in an effort to jointly overcome the difficulties at the current stage.
Fourthly, the industry association should play a bigger role. Guidance will be given to Shanghai Tourism Industry Association to play a bigger role so as to form synergy across the industry. The association takes the initiative to give up the charge of membership fees for the first half of 2020.
39. Who can enjoy the policy which states that “construction fee payers for cultural undertakings in life service industry will be given fiscal subsidies according to the severity that they have been affected by the epidemic and the actual paid fees”? How to apply?
A: Construction fee payers for cultural undertakings in life service industry refer to units and individuals who provide entertainment services. Shanghai has made it clear that from January 1st to 3 months after the epidemic is over, construction fee payers for cultural undertakings in life service industry are entitled to fiscal subsidies that are equal to 100% of its actual paid fees.
The application for the subsidy will be done with “one-to-one” online approach. Upon receiving information sent by E-Tax of Shanghai Municipal Tax Service after each quarterly application period ends (the first starts in April of 2020), related payers can fill in the Application Form for Fiscal Subsidies of Construction Fee for Cultural Undertakings online. Most of the information needed is automatically uploaded by taxation management system, the payers are only required to supplement and confirm the information. Once approved, the eligible payers will receive the subsidies before the 10th of the following month after application and will be notified about the progress by means of short messaging service, E-tax, All-in-One Portal among others.
You can refer to the sections of Public Notice of Public Government Affairs on the website of Shanghai Municipal Tax Services (www.czj.sh.gov.cn).
III．Financial aid will be enhanced to help companies overcome difficulties.
40. What credit aid will be given to the industries deeply impacted by the epidemic?
A: Banking institutions in Shanghai should not suspend, withdraw or postpone loans made to the companies in the hardest-hit industries, for instance, tourism, accommodation and catering, wholesale and retail, transportation, logistics and warehousing, culture and entertainment, convention and exhibition, and the companies who have developmental prospects but face temporary liquidity squeeze.
Targeted policies will be adopted for hugely-impacted companies whose loans are due in the near future. Banking institutions are encouraged to initiate negotiations with clients about concrete repayment approach and schedule, make early arrangements for loan renewal and try best to renew loans that ought to be renewed by renewing loans without the repayment of principal and using annual review system.
Banking institutions in Shanghai are encouraged to proactively renew loans for clients whose loans are due before June 30th of 2020 but unable to repay as scheduled due to the impact of the epidemic. The extension will be no more than 1 year.
41. Are there any favorable terms for loans extended to the companies in the hardest-hit industries?
A: Shanghai Banking and Insurance Regulatory Commission urges banking and financial institutions in Shanghai to take measures in order to help affected companies overcome difficulties, such as loan interest rate adjustment, reduction and exemption of service charges.
Banking institutions are encouraged to do what they can to reduce interest rate during a certain period for severely-impacted companies according to the detailed rules made by the banking institutions themselves.
The deeply-affected companies who are able to repay their loans and interests as scheduled will be granted corresponding favorable terms for future loans.
42. I come from a new energy vehicle company, and one of our vehicle models can be used in the epidemic prevention and control, thus I hope to get a loan from banks. Previously, some banks approached us, saying they could make a loan to us. Although we are on the list, it is uncertain whether the loan can be issued. For this, who should I turn to?
A: According to the state and Shanghai local regulations, a list management model is adopted for enterprises playing key roles in the epidemic prevention and control. After application, the companies will be included in the list once examined and approved by Shanghai Municipal Commission of Economy and Informatization and Shanghai Municipal Development and Reform Commission. Key support will be given to seven major types of companies, for example, key medical supply production, purchase and storage as well as supply companies, key supporting enterprises and leading companies for life necessities, and etc. The list is subject to changes in accordance with the needs generated by the epidemic prevention and control and the situation of production and supply.
Companies on the national list can turn to the Shanghai local branches of China Development Bank, the Export-Import Bank of China, Agricultural Development Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China for application.
Companies on the municipal list can apply with Bank of Shanghai, Shanghai Rural Commercial Bank, Shanghai Hua Rui Bank and the local branches of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China.
43. What measures have Shanghai financial institutions taken to provide financing support for the medium, small and micro-sized enterprises in terms of the return to work, the resumption of production and the restoration of market consumption?
A: Currently, banks in Shanghai have extended more credit loans to the medium, small and micro-sized enterprises. Meanwhile, efforts have been made to further reduce their cost of financing through multiple ways.
First is to leverage PBOC’s special re-lending program. The enterprises playing key roles in the epidemic prevention and control who are on the list approved by Shanghai Municipal Commission of Economy and Informatization and Shanghai Municipal Development and Reform Commission for special program of relending can relend from Bank of Shanghai, Shanghai Rural Commercial Bank, Shanghai Hua Rui Bank and the local branches of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China.
Second is to reduce LPR (Loan Prime Rate) for the corresponding period by 25 basis points, banks in Shanghai can make decisions on their own and provide support to eligible companies.
Third is to leverage PBOC’s relending policies to support agriculture and SMEs, Bank of Shanghai, Shanghai Rural Commercial Bank, Shanghai Hua Rui Bank and 14 village or town banks in Shanghai can relend to relevant companies at an interest rate of no higher than 4.55%.
Fourth is to encourage banks to reduce the comprehensive financing cost of inclusive loans for small and micro-sized enterprises by 0.5 percentage points.
In addition, for those severely-affected enterprises and individually-owned businesses who have found it hard to repay the mature debt and temporarily lost source of income, banks are encouraged to provide support through adjusting repayment schedule, extending repayment period, renewing loans without the repayment of principal, deferred payment of interest and exemption of penalty interest among others. These policies are at the discretion of banks after making assessment of the actual situation of companies.
44. Is there more capital support policy for asset-lite companies and tech firms?
A：Currently, responding to companies’ financing difficulties and high cost of financing incurred by the lack of mortgage asset, Shanghai has rolled out financial products, such as loan and credit program for new and high-tech firms, loans for innovation firms to go public, tech-firm commitment loan, loans for little-giant tech firms, micro loans, loans for cultural innovation companies, and etc. Relevant banks have introduced venture loan and loan renewal without the repayment of principal, catering to the financing needs of companies at different phases of development.
Meanwhile, tech firms can choose to get listed on the Sci-tech Innovation Board of Shanghai Equity Exchange. Good tech companies can strive for going public on STAR Market of Shanghai Stock Exchange. In addition, in response to the epidemic, financial institutions in Shanghai have rolled out varieties of measures to serve companies’ financing needs. Companies can make applications if conditions are met.
45. Shanghai encourages Shanghai Pudong Development Bank, Bank of Shanghai and Shanghai Rural Commercial Bank to expand credit loans in order to support severely-impacted industries and the medium, small and micro-sized enterprises. Whereas for companies who do not have accounts in these three banks, how can they apply for loans?
A: Companies can access more information about related policies on the official websites or WeChat account of the three banks. Telephone consultation is also available:
Bank of Shanghai: Guohua YANG 68476748 13003132115
Shanghai Rural Commercial Bank: Yu YANG 61899063 13816178046
Shanghai Pudong Development Bank: Honglin ZHANG 68886037 18621502525
46. Is there any interest cut for companies that already filed an application for loan? Or is it possible to have relending rate cut on the basis of the existing loan application?
A: During the epidemic period, the existing loan contract should be honored in principle.
For those severely-affected enterprises and individually-owned businesses who have found it hard to repay the mature debt and temporarily lost the source of income, banks are encouraged to provide support through adjusting repayment schedule, extending repayment period, renewing loans without the repayment of principal, deferred payment of interest and exemption of penalty interest among others.
In addition, regarding the PBOC’S relending program targeted at agriculture and SMEs, companies are advised to contact the banks in charge. The policies are at the discretion of banks after making assessment of the actual situation of companies.
You may refer to the following website for more info and contact person of the PBOC’S relending program targeted at agriculture and SMEs:
47. Some medium, small and micro-sized enterprises are facing operation difficulties due to the epidemic and have temporarily lost the source of income so that they are unable to repay bank loan on time. What measures will Shanghai take in terms of financing guarantee to ease the financing difficulty? And how to do that?
A: To give full play to the functions of policy financing guarantee, Shanghai Administration Center of Policy Financing Guarantee Funds for SMEs (hereinafter referred to as the center) has stepped up its efforts to support the companies who have seen delay in the production and the return to work and a sharp decline in cash flow income and are unable to repay debt on time. In terms of financing guarantee, the center offers the following policy support:
Firstly, the volume is increased and service charge is reduced. To support companies, the Center makes sure the 2020 incremental policy financing guarantee loan will be over RMB 3 billion more than that of the last year. At the same time, the rate of financing guarantee fee for new loan applications from micro, small and medium-sized enterprise is to be reduced to 0.5% per year, and the re-guarantee fee rate is to be cut by half.
The second approach is to give priority to key companies and open green channel. The Center establishes a “white list” in accordance with the list of enterprises playing key roles in the epidemic prevention and control at national and municipal level. With the white list, the center launches parallel approval procedure with cooperating banks, reduce the time it takes to get approval, optimize approval procedures and organize designated team to work on this and provide expedited and customized services. The examination and approval will be done within 2 work days once the materials are complete.
The micro, small and medium-sized enterprises shall submit applications to banks. And the companies on the list of enterprises playing key roles in the epidemic prevention and control are simultaneously incorporated into the Center’s “white list”. A parallel approval approach will be taken by cooperative banks and the Center. And the companies who have met conditions will be examined by the Center. The Center adopts online approval and will gradually realize the online management covering the whole process including application, acceptance and approval. (hotline: 63771107 for business department I of the center)
48. What are the requirements of the PBOC relending program?
A: Special relending is an important macro policy to guarantee supply. PBOC provides low-cost capital to major national banks and some local incorporated banks in key provinces in an effort to offer low-interest loan to key companies producing, transporting and selling epidemic prevention supplies and life necessities.
The list of key companies is defined by the National Development and Reform Commission, Ministry of Industry and Information Technology and provincial-level people’s governments. Financial institutions will provide loans at preferential lending rate to key companies after verifying the intended use of loans. The central budget will subsidize 50% of the actual loan interest rate that companies obtain, making sure that the real financing cost of companies will be lower than 1.6%.
49. Which banks should companies turn to for applying the PBOC earmarked relending?
A: Key companies on the national list for epidemic prevention and control can apply for preferential loans from the Shanghai local branches of China Development Bank, the Export-Import Bank of China, Agricultural Development Bank of China, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China
Key companies on the municipal list for epidemic prevention and control can apply for preferential loans from Bank of Shanghai, Shanghai Rural Commercial Bank, Shanghai Hua Rui Bank and the local branches of Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China.
50. What is the interest rate of this special relending program?
A: The interest rate will be 250 basis points lower than the one-year Loan Prime Rate (LPR) of the last month. Financial institutions offer credit support at preferential rate to enterprises playing key roles in the epidemic prevention and control with the upper limit of loan rate 100 basis point less than the latest-released one-year LPR at the time when the loans are issued.
51. Is there any requirement for the use of the loan?
A: In accordance to the spirit of central and Shanghai municipal documents, enterprises playing key roles in the epidemic prevention and control primarily consist of the following types:
a. key medical suppliers of medical protective clothing, quarantine clothing, medical masks or civilian masks with protective effect, medical goggles, novel coronavirus detection kits, negative-pressure ambulances, sterilizers, disinfection products, infrared thermometers, intelligent monitoring and detecting systems and related drugs;
b. key manufacturers of raw materials, equipment for the above mentioned products and related supporting enterprises;
c. key producers of daily necessities;
d. key medical supplies purchase and storage enterprises;
e. enterprises providing, transporting and selling ICT equipment and information service system in response to the epidemic.
Enterprises playing key roles in the epidemic prevention and control should spend all the preferential loans on production and operation in relation to the outbreak prevention and control, actively expand production and supply, comply with unified state allocation to ensure a stable and orderly supply of key medical materials and daily necessities.
Relevant departments should enhance supervision, administration and follow-up auditing to ensure the loans are granted in accordance with the laws and regulations and no malpractice should be allowed.
52. What are the requirements for the fiscal interest subsidy?
A: Interest subsidies should be granted to enterprises not only key to the epidemic prevention and control and included in the national list and the municipal list, but also to enterprises which have obtained the credit funds issued by the financial institutions using the special refinancing loans of the People's Bank of China. In addition to the special refinancing of the People's Bank of China in support of financial institutions to provide loan with preferential interest rate, fiscal interest subsidy will be set at 50% of the actual loan interest rate obtained by the enterprise within no more than 1 year.
53. What are the application procedures for fiscal interest subsidy?
A: Enterprises playing key roles in the epidemic prevention and control can fill in the application form of fiscal interest subsidy by virtue of the loan contract newly effective from January of 2020 and submit the form to the Shanghai Municipal Finance Bureau before May 22, 2020. The Shanghai Municipal Finance Bureau will summarize the applications of fiscal interest subsidy and submit them to the Ministry of Finance for examination and approval, and apply to the Ministry of Finance for fiscal interest subsidies. The Shanghai Municipal Finance Bureau will allocate the fiscal interest subsidy issued by the Ministry of finance to relevant enterprises in a timely fashion. After May 22, it will be decided whether to accept new application for fiscal interest subsidies according to the situation.
54. What are the requirements for usage and supervision of fiscal interest subsidies?
A: Relevant departments should step up supervision, administration and follow-up audit, making sure the fiscal interest subsidy will be used exclusively for the intended purposes. It is strictly prohibited to misappropriate the fiscal interest subsidies to repay other debts of the enterprises, or to carry out arbitrage activities such as financial investment and financial management. Once discovered, relevant enterprises and financial institutions will be disqualified from enjoying preferential policy support, special refinancing loans and fiscal interest subsidies will be withdrawn ahead of schedule and the parties involved will be seriously held accountable.
55. What is the goal that the banking institutions in Shanghai aim to achieve for inclusive loans for the small and micro enterprises throughout the year?
A: Banking institutions in Shanghai should accurately evaluate the impact of the epidemic on business operation and management, take measures to expand credit issued to private enterprises and small and micro enterprises, ensure that the growth rate of inclusive loans for the small and micro enterprises is not lower than the average growth rate of all loans throughout the year, and strive to reduce the comprehensive financing cost of inclusive loans for the small and micro enterprises by another 0.5 percentage points.
56. Is there any supporting policy for enterprises involved in epidemic control and enterprises seriously affected by the epidemic?
A: Banking institutions in Shanghai should single out the credit plan to ensure that there are sufficient credit resources for epidemic prevention related enterprises and the enterprises severely affected by the epidemic. Therefore, banking institutions should proactively increase credit lines for qualified small and micro enterprises that have higher demand for capital due to the outbreak without mandatory demand for additional materials and additional credit enhancement measures. Money can be drawn at any time to meet the temporary capital need of the enterprises.
57. Is there a credit financing “green” channel for companies’ resumption of production?
A: Shanghai Banking and Insurance Regulatory Bureau requires banking financial institutions in Shanghai to adopt a separate credit plan for epidemic prevention related enterprises and the enterprises severely affected by the epidemic, and to establish a credit "green" channel by adopting the special policies such as the "Shanghai Industrial Green Loan" policy, so as to provide credit financing support for companies’ resumption of production.
58. Is there any new insurance targeted at the resumption of production and the restoration of work for companies?
A: COVID-19 related insurance products have been launched by many Shanghai insurance companies to alleviate the pressure caused by resumption of production and the r restoration of work for companies.
On one hand, the scope of production safety related insurances such as safe production liability insurance, employers; liability insurance and business interruption insurance will extend to include COVID-19 with no additional cost, protecting enterprises from losses due to employees’ infection after the resumption of work.
On the other hand, insurance period of travel agency liability insurance, carrier’s liability insurance and construction risk insurance will be extended with no additional cost for enterprises suspending operation in tourism, transport and construction industries.
59. What preferential financial policies does Shanghai have for financial leasing companies？
A: In terms of financial leasing services of medical equipment used for epidemic prevention and control, financial leasing companies are encouraged to provide preferential financial services for medical equipment leasing by postponing or reducing the relevant rents and interests.
60. Is there any specific supporting policy for startup guaranteed loan?
A: Firstly, the Shanghai Administration Center of Policy Financing Guarantee Funds for SMEs should give priority to the individuals and enterprises that have temporarily lost their sources of income due to the epidemic by granting startup guaranteed loans. Secondly, borrowers, if infected with the novel coronavirus or temporarily losing source of income due to the epidemic, are entitled to repayment extension within one year in principle and with continuous fiscal interest subsidies.
61. Is there any financing guarantee support for enterprises playing key roles in the epidemic prevention and control and the medium, small and micro enterprises?
A: The Shanghai Administration Center of Policy Financing Guarantee Funds for SMEs actively coordinates relevant financial institutions in Shanghai so that financing guarantee services are provided to enhance credit for enterprises. Financial institutions are encouraged to increase credit support for the medium, small and micro enterprises, so as to ensure that loans are not suspended, withdrawn, or postponed.
The medium, small and micro enterprises which are severely affected by the epidemic and have difficulties in repaying debts when due, but have good business prospects, will enjoy loan renewal without the repayment of principal and roll-over credit on the basis of strict examination and verification. For those who have already enjoyed the fiscal interest subsidy, the fiscal interest subsidies will be extended accordingly.
For key enterprises in the epidemic prevention and the medium, small and micro enterprises severely affected by the epidemic, the Shanghai Administration Center of Policy Financing Guarantee Funds for SMEs will lower the financing guarantee rate to 0.5% per year for the new applicants (including roll-over loans without repayment of the principal upon maturity). The re-guarantee rate will be reduced by half. The service charge for startup guarantee loans will continue to be exempted.
62. For enterprises that are unable to repay debts due to epidemic impact, how to make sure their credit is not affected?
A: Enterprises that play key roles in the epidemic prevention and control are advised to negotiate a flexible and reasonable repayment extension with the lending institutions when they have temporarily lost their sources of income or failed to repay due to the epidemic impact.
The lending institutions should report the credit records of the enterprises according to the rearrangement agreed upon by the two parties.
63. How to apply for an extension when an enterprise cannot repay principals and interests on time due to the epidemic impact?
A: Upon application, banking financial institutions should offer temporary extension arrangements for the loan principals that are due since Jan 25, 2020 and for the loan interests that ought to be paid between Jan 25, 2020 to Jun 30, 2020 for the medium, small and micro enterprises with difficulties (including small and micro business owners and self-employer).
Payment of principals and interests can be extended to Jun 30, 2020 to the maximum without penalty interest.
According to the actual situation, financial institutions in banking sector should negotiate specific extension arrangement with the medium, small and micro enterprises that are severely affected by the epidemic and expecting a long recovery cycle, but have sound business prospects.
64.When negotiating with lending institutions the rearrangements of debt repayment, what materials should be prepared by income-short enterprises？
A: Different lending institutions might need different materials. Please consult individual institution for specific requirements.
Generally speaking, the materials include bank account statement, corporate financial report and letter of commitment of the legal representative of the enterprise on authenticating of the materials submitted.
IV. Support for Enterprises to Stabilize Employment
65. Enterprises are now facing the most stressful cash flow crunch. But when will the social security expense already deducted in February be returned?
A: “Filing this month, paying next month” is the social security collection mode adopted by Shanghai. Therefore, the expense deducted in February is the one levied for January in real term.
In accordance with the national regulations, policies related to deduction and exemption of social security in Shanghai will be rolled out soon. Social security agencies will provide convenience to companies going through related procedures.
66. According to national policies, social security payment will be exempted, and housing provident fund payment will be deferred from February to June for small and medium-sized enterprises in Shanghai. However, Shanghai’s 28 Policy Measures include no such policies. How will Shanghai’s policies connect with the national ones in this regard?
A: On Feb 7th, Shanghai unveiled Shanghai’s 28 Policy Measures. On Feb 20th, Notice on Phased Reduction of Companies’ Social Security Contribution was issued by Ministry of Human Resources and Social Security, Ministry of Finance, State Taxation Administration. The Notice stipulates that in all provinces except Hubei, the endowment insurance, unemployment insurance and employment injury insurance that are paid by employers of the medium, small and micro enterprises can be exempted for a period of no more than 5 months. Insurance paid by employers of large-sized enterprises can be reduced by half for no more than 3 months. Specific implementation measures will be issued by provinces, autonomous regions and municipalities directly under the central government.
Shanghai’s policies in relating to social security premium exemption and reduction are formulating and will soon be issued. The policies that have been announced will continue to be implemented.
67. Which enterprises can enjoy refund of unemployment insurance?
A: Enterprises that have no layoff or few layoffs, and have paid insurance for more than 1 year are entitled to a refund of 50% of the total actual unemployment insurance paid by the enterprises in the previous year.
68. In comparison with the past, is there any new regulation regarding this policy of unemployment insurance refund?
A: This policy has expanded the scope of beneficiaries for the medium, small and micro-sized enterprises.
The policy threshold is lowered for the medium, small and micro-sized enterprises with a relaxation of application requirement. The required layoff rate should be no higher than 5.5%, which is the control target of last year’s national urban surveyed unemployment rate. And the required layoff rate for enterprises with fewer than 30 employees should be no more than 20% of the total workforce.
69. How to apply for “extension of social security payment”?
A: Companies can pre-apply via “12333” labor security hotline, or through the official account “上海社保” (Shanghai Social Security) in Wechat. Basic information and contact number of the insured units are required during pre-application.
Within three working days after the successful submission of the pre-application, the social security agency will contact the contact person through the reserved telephone number to learn about the impact of the epidemic and confirm the reason for the application of the extension. The enterprise will then submit the application for delayed payment of social security with official seal, and the application can be submitted to the social security agency by registered mail or express delivery. After receiving the written application, the social security agency will give final feedback by telephone within three working days.
70. What are the adjustments to employees’ medical insurance premium rate in Shanghai?
A: From February to December 2020, the payment rate for employees’ medical insurance (including maternity insurance) is to be reduced by 0.5%, from 10.5% to 10%. The payment rate of basic medical insurance for flexible employment personnel is to be lowered from 11.5% to 11%.
The medical insurance and social security agencies are promptly implementing the policy so that it can benefit the insured units when paying the insurance in February.
71. What is the starting and ending time for the adjustment of employee medical insurance rate?
A: Starting from this year, the starting and ending time for the payment of employee medical insurance and social security insurance will be July 1st of the current year and June 30th of the following year. Employees’ medical insurance payment in 2019 will be extended for 3 months.
72. How can enterprises apply for the subsidies for online training due to the impact of the epidemic?
A: In Shanghai, in order to get the subsidies, enterprises should file first, and then carry out the training.
Prior to training, consistent with the system for collection and administration of taxation, the enterprise should be filed at district-level human resources and social security department, submit materials such as application report, training program, enterprise qualification, and sign the letter of commitment on the application of subsidies for organizing employees to participate in online vocational training during operation suspension incurred by the epidemic. After the training course is completed, enterprise shall submit the trainee roster, credentials of teaching record, enterprises’ bank account information. Once approved, the subsidies for the training fee will be allocated to the enterprise within three months.
Subsidies will be done with no direct–contact approach, such as e-mail, fax or express delivery. Pudong or other competent districts have also built their own application systems to raise the efficiency of handling subsidies application. Enterprises may refer to the application handling contact lists of each district for consultation. The latest version can be found on Wechat, Weibo and App of Shanghai Municipal Human Resources and Social Security Bureau.
73. If a company entrusts a third party to provide online training services, what are the requirements for the third-party service provider?
A: In principle, there are three requirements for “third-party online training services provider”: they must be in possession of a self-owned platform, courses and proof for real training process. That is to say, the online training service provider should be able to provide sign-in registration, learning record, Q&A and quiz to ensure the learning process can be checked and traced.
In addition, enterprises carrying out their own online training should also meet the above-mentioned requirements in order to get training subsidies.
74. Is there any directory of designated training institutions or training courses? What is the subsidy standard? How to define period of operation suspension? When will this policy expire?
A: There are no designated training institutions. Employees can attend online training through self-developed platforms, various APPs or third-party online training courses provider commissioned by the enterprise.
The training, related to the primary businesses of enterprises, should meet the practical needs of the enterprises’ operation.
The standard is that subsidies will cover 95% of training costs filed with and recognized by the district-level human resources and social security department. In principle, every employee is entitled to no more than 600 yuan per training program, and no more than 3 times of subsidies.
Period of operation suspension refers to the period when an entire or partial operation is suspended as defined by district-level human resources and social security departments in accordance with the actual suspension of operation.
This policy will be effective as of the date of issuance of Shanghai’s 28 Policy Measures and stay valid until the epidemic is over. In practice, district-level governments can extend the implementation period according to the actual resumption situation. The period can be extended “until three months after the epidemic is over”, as is stipulated in “Shanghai’s 28 Policy Measures”.
V. Promotion of an orderly resumption of work and production
75. My company wants a resumption of work. How to apply?
A: No approval is needed. On Feb 28, Shanghai issued a new version of guidance on resumption of work. Enterprises can resume operation once they complete the filing procedure through All-in-one Portal and no approval is needed provided that the enterprises have put in place sound epidemic prevention and control measures.
Enterprises in construction, part of life services, cultural and entertainment industry should resume work under the guidance of relevant competent industrial authorities.
76. Our company has clients across China. Although restrictions on logistics within Yangtze River Delta region have been lifted, they still remain in other areas, resulting in failure of goods delivery to the warehouse of the clients even though they have been already arrived at the clients’ cities. Can Shanghai coordinate this matter?
A: Demands of enterprises for logistics and transportation services are growing as they gradually resume work. National-level guidelines have been issued to coordinate prevention and control of the epidemic and resumption of work and production, in the way that the responsibilities of monitoring and facilitating resumptions are assigned, unequivocally, to each district based on the domiciles of enterprises. Notice on Work by Governments of All Levels on Guaranteeing Road Transportation Service in Urban and Rural Areas during the Epidemic Prevention and Control with Science-based Approaches, issued by the Ministry of Transport on February 28th, also requires local governments to adopt differentiated managing and control measures and resume road transportation services in urban and rural areas based on the list of county-level jurisdictions by different risk assessments (low-risk, moderate-risk and high-risk). Currently, the national road transportation network are restoring in an orderly manner. The designated authorities of Shanghai will do their best to solve the specific difficulties of enterprises by coordination and carry them safely through resumption.
77. Many of my workers living in the Yangtze River Delta region still faces restrictions during their daily commute to Shanghai . Is there a solution to that?
A: At a video conference hosted by top leaders of Shanghai, Jiangsu, Zhejiang and Anhui on joint efforts for prevention and control of COVID-19 within the Yangtze River Delta region, 7 areas for collaboration were identified with a mechanism being established and official papers being circulated as reference for implementation.
Among the 7 areas, the second one is the establishment of mutual recognition system for Notification for Completion of Health Observation. A unified format will be adopted for the notification which will be issued by designated organizations for people who have completed their quarantine with the contact information of the organizations included. The notification will be recognized in the whole region, which will spare the carriers from a second quarantine.
At the current stage, the three provinces and the city of Shanghai have put in place the innovative application of QR code for COVID-19 prevention and control. In accordance with the consensus reached in the video conference by the attending leaders, the relevant authorities are implementing the roll-out of the QR mechanism.
Currently, the three provinces and the city of Shanghai have agreed upon areas that include the standards, scope of application and the mutual recognition mechanism for the QR code. The implementation of the mechanism will be expedited following the principle of equal validity for the QR code and the notification offering convenience for the resumption of work and production as well as people’s daily lives within the region.
78. My company is a household appliance manufacturing company with half of the staff living in Jiangsu Province and commuting daily by road. The average pass time is 1.5 hours at the Huaqiao Toll Station Checkpoint or 30 minutes at Shanghai-Changzhou Highway Checkpoint. Is there any measure to be taken to shorten their commuting time?
A: In accordance with the requirements of the central government, support for enterprise resumption has been increasingly intensified in Shanghai, Zhejiang, Jiangsu and Anhui. At present, traffic restrictions across provincial borders have been officially lifted and highway traffic within the three provinces and Shanghai has already been restored to business as usual status.
Take the toll stations in Anting, Jiading District in Shanghai and Huaqiao, Kunshan of Jiangsu Province as examples, currently, with conditions permitting, all the lanes are open for traffic on G2 Beijing-Shanghai Highway. To be specific, all the 8 lanes are open for traffic through Huaqiao Toll Station of G2 Beijing-Shanghai Highway and it is the same for both the 2 lanes (1 for each direction) at Lvdi Avenue Toll Station of G2 Beijing-Shanghai Highway at Huaqiao.
Some enterprises have met the problem of long commuting time of their staff. Again, take Anting and Huaqiao as examples, statistics show that during rush hour in the morning, the waiting line to enter into Shanghai at Huaqiao Toll Station adds up to 800 meters long. This situation is mainly caused by three factors. First, the Ministry of Transport still requires strict implementation of all kinds of prevention and control measures including temperature check at inter-provincial traffic and transportation checkpoints. Second, inter-provincial commuting is increasing due to concentrated resumption of enterprises combined with returning migrants. Third, the times for exit and entry via road transportation vary in correlation to the traffic situation in the downtown area of Shanghai. As epidemic control situation improves and most residents return to Shanghai, it is projected that inter-provincial commuting time will be shortened.
79. As enterprises are stepping up the pace to resume work and production, staff recruiting remains a difficulty for them. On the supply side, migrant workers are unable to leave their hometown for work in Shanghai; on the demand side, enterprises find it hard to recruit new staff due to frequent flow of human resources within the Yangtze River Delta region. Can the government help us deal with this problem?
A: At present, recruitment needs are mounting as more and more enterprises are resuming work. Labor shortage has become the most direct problem for most enterprises.
On February 27th, the top leaders of provincial administrations in the Yangtze River Delta region hosted a video conference in which a mechanism of coordination and cooperation to support recruitment by enterprises for resumption was established and was listed as one of the five working mechanisms of coordinating epidemic prevention and control with socioeconomic development of Yangtze River Delta region for further implementation.
A preliminary action plan has been proposed by relevant department to deal with the labor shortage through two specific measures.
First, an information alignment mechanism shall be established. Human resources authorities in three provinces and Shanghai shall keep in close work contact with each other and sort out the labor demand of the local enterprises in a timely manner, collect information about job vacancies, as well as supporting policies and measures for employment which will be released on official employment service platforms in the region. Local public recruitment information centers or their WeChat official accounts will be leveraged to organize online job fairs and matchmaking activities to maximize communication and exchanges between recruiters and candidates.
Second, a service mechanism will be established to help migrant workers return to their posts. In accordance with the latest local requirements on prevention and control, human resources authorities in the three provinces and Shanghai shall match the supply and demand sides of labor service with precision, as well as proactively communicate and coordinate with enterprises and relevant authorities such as health, transportation and public security on the drafting and implementation of detailed plans that connect supply and demand sides of labor service with specified return times, routes as well as personnel arrangements. For cases of directional group returning, the role of One-on-one Service Platform for Matching Migrant Worker Labor Service established by the Ministry of Human Resources and Social Security shall be given a full play to provide green access for returning workers.
80. Some provinces and cities arrange chartered buses or flights to take workers back for work. Is there any supporting measure in Shanghai to help with this matter too?
A: Shanghai is strengthening efforts to keep the traffic and transportation in order and the roads unblocked. On February 22nd, the Office of the Leading Group for Epidemic Prevention and Control of Shanghai issued the Notice on Further Regulation of Quarantine, Check and Control Measures in the City’s Entrances and Exits and Guaranteeing Orderly Traffic and Transportation as well as Unblocked Traffic. The Notice encompasses regulation of the city’s entrances and exits, maximum opening of accesses, as well as improvement on approval rate of chartered bus application, to further ensure unblocked transportation of trucks, to increase the number of vacant parking lots in the city, to restore inter-provincial passenger transport by steps, etc.
Efforts are being made in Shanghai to further optimize the management and service for migrant workers returning to Shanghai by chartered buses. Major employers in each district are required to keep one-on-one contact with major labor sources so as to strengthen the connection between supply and demand sides of HR services. Meanwhile, enterprises are encouraged to take workers back to Shanghai by arranging chartered bus as contribution to orderly traffic.
81. at present, expatriate staff doesn’t have the access to the Shanghai QR code, making it inconvenient for them to go to work. What measures will be taken to help them resume work?
A: Since March 1st, the Shanghai QR code is applicable for most people including those from Hongkong S.A.R., Macau and Taiwan and those of foreign nationalities upon application.
Upon identity authentication on Alipay, people from Hongkong S.A.R., Macau and Taiwan and those of foreign nationalities can get their own personal Shanghai QR code through Alipay mini programs or SuiShenBan APP. Hongkong S.A.R., Macau and Taiwan residents can get the QR code simply in SuiShenBan APP after identity authentication.
82. 80% of my company’s staff have resumed work but the masks and disinfectant we have purchased are not sufficient for daily operation. Can the government provide procurement channels of prevention and control supplies for micro, small and medium-sized enterprises?
A: Continuous efforts have been made to guarantee availability of prevention and control supplies for enterprises, including implementing the mechanism of inter-provincial (city) referral and mutual support in providing key prevention and control supplies. Due to those collective efforts, more than 300 upstream enterprises (according to incomplete statistics) have resumed work and production ahead of prescribed time so as to guarantee resumption of enterprises that produce prevention and control supplies.
In addition, authorities responsible for supply guarantee in the three provinces and Shanghai have been updating lists of supply and demand, and support each other’s provinces and cities with supplies through coordinated resource mobilization. The Customs within the Yangtze River Delta region have also established a joint action mechanism to coordinate rapid customs clearance for prevention and control supplies in which facilitation measures are carried out including zero waiting time for customs clearance of key supplies, mainly protective masks, suits and goggles.
Enterprises can purchase prevention control supplies for resumption through the following two channels.
a. Supplies can be purchased through the online channel. Currently in Shanghai, masks over 2 RMB and masks produced by a group of companies using new industrial processes and materials are now available in the market to meet the needs during resumption of enterprises. Those enterprises that have already resumed can make group purchase on iBailian and Shanghai Enterprise Service Cloud in addition to their own purchasing channel. Information of enterprises producing disinfectant and hand sanitizer, etc. is posted on the Shanghai Enterprise Service Cloud.
b. Supplies can be purchased through coordinated allocation channels. In accordance with the plan for guaranteeing masks of civil use during resumption of work and production, enterprises can update their needs to relevant authorities in the district, county-level administrations or industrial parks where they are located. After coordinated allocation at the district level is completed, enterprises can purchase masks at designated sites.
83. My company is located in A District, but our warehouse is in B District. How the resumption should be carried out by enterprises with operations in multiple districts?
A: For the resumption of enterprises with operations in multiple districts, it has been specified that this matter is the responsibility of governments presiding over the operation sites of the enterprises. The governments shall actively assist enterprises by solving the actual problems faced by enterprises.
84. Most of my company’s suppliers and clients are not located in Shanghai and different places have different resumption schedule. Is there any measure to be taken by the government to realize a synchronized resumption across the whole industry chain?
A: An enterprise relies on the whole industry chain to be operational. The industry chain is so interconnected that stagnation of any part of it will fail the whole chain. Therefore, enterprise resumption is a matter that requires support from the whole industry chain.
On February 27th, the top leaders of provincial administrations in the Yangtze River Delta region hosted a video conference in which a mechanism of coordination and cooperation of mutual support for resumption of the industry chain was established and was listed as one of the five working mechanisms of coordinating epidemic prevention and control with socioeconomic development of Yangtze River Delta region for further implementation.
A preliminary action plan has been proposed by relevant department to provide support with three specific measures.
First, a collaboration and communication mechanism on resumption of work and production will be established. This mechanism will be led by heads of authorities in charge of economy and informatization, with participation of commerce departments and development and reform departments, to harmonize resumption across the industry chain.
Second, situations of industry chain and supply chain will be sorted out comprehensively. Focus will be put on major industries, enterprise and industrial parks within the Yangtze River Delta region. Situations of industry chain and supply chain will be comprehensively assessed with a list of companies being produced, which entails priority support for acceleration of resumption.
Third, mutual support and coordination on factors necessary for resumption will be strengthened. Collaboration among regions will be in place to guarantee the supply of raw materials. Full support will be given to ensure the smooth delivery of emergency supplies by proactively clearing the way for supply delivery vehicles within the Yangtze River Delta region. Regional mutual recognition of people’s health status confirmation will be carried out to ease difficulties in their inter-provincial commuting and they will also be spared from a 14-day quarantine period as long as they meet all the health management requirements. An information sharing and mutual supporting mechanism will be put in place to guarantee the key prevention and control supplies including masks, protective suits and goggles.
85. Since deliverymen are not allowed to enter into office parks due to management and control measures, enterprises find it hard to receive necessities for resumption. Is there a more efficient way to deliver bulky and heavy items into office parks?
A: Since epidemic outbreak, many places have strengthened prevention and control measures where many communities and office parks are closed for outsiders. Therefore, more efforts are required to achieve both safety and convenience during the last-one-mile delivery service.
Relevant districts and government authorities have been coordinating actively and researching on solutions to this situation. On February 28th, the prevention and control headquarters of Hudong New Village Subdistrict of Pudong New District awarded a pass to Xu Jun, a deliveryman of JD Logistics in order for him to provide non-contact delivery service for residents within this subdistrict. Relevant districts and government authorities will also pool resources as the next step to facilitate office parks in resumption.
86. Cloud-based services are widely adopted during this epidemic. What kind of support will the government give to new forms of businesses, including services around webcaming, telemedicine and telecommuting?
A: Shanghai will step up the pace to foster new forms and new models of businesses, including online shopping, online education, online office, online service, digital recreation, digital life, smart delivery, etc. The city will also endeavor to develop health industry vigorously, including telemedicine, original innovative drugs, medical supplies, medical instruments, etc., and give support to rapidly growing innovation-oriented SMEs.
Shanghai Municipal Commission of Economy and Informatization has issued the Notice on Support for Work and Production Resumption of Enterprises by Fostering New Cloud Service. It is stated in the Notice that new cloud computing products and services are encouraged to be fostered and applied. Also, all eligible projects and enterprises will be supported by funding from channels that include the municipal level earmarked fund for the development of software and IC industry; special project for cloud-based enterprise operation; earmarked fund for the development of first editions of software products. Currently, Shanghai’s relevant authorities are drafting policy documents to further support the development of new forms and new models of businesses.
87. The government encourages many industries to convert to online sales model. However, given that there are quite some requirements for the qualification of online sales, will the government lower the threshold for more enterprises?
A: Enterprises can sell goods on the internet through self-developed online platforms or in collaboration with third-party organizations. Qualifications of online and offline sales remain basically the same and no change has been made to the process of application for qualification.
88. Which government department should beauty and hair salons consult with in terms of application for resumption? What requirements do they need to meet?
89. As it was highlighted in Shanghai’s 28 Policy Measures, SMEs will be given stronger support by means of sci-tech innovation e-coupons. What specific measures will be taken?
A: In order to fully support innovative activities by enterprises during epidemic prevention and control, quota cap for sci-tech innovation coupons handled in 2020 is to be elevated. For enterprises, the annual quota cap will raised from 300,000 RMB to 500,000 RMB. Start-up teams’ quota remains at 100,000 RMB. The amount of coupons that can be used will be calculated on the basis of 50% of the eligible service contract value.
90. What kind of business can enjoy sci-tech innovation coupon service? How soon can the coupon be redeemed?
A: In total, 6 categories of services can enjoy the benefit of sci-tech innovation coupon mechanism, including strategic planning for innovation, R&D of new technologies, technology transfer, inspection and detection as well as sharing of innovation resources, which can be further divided into 15 types and 34 specific items, which will be updated annually.
Incubation services are included for the first time. It has been made clear that incubation services excluded from the negative list (basic services that include office leasing, property management, etc.; general commercial services that include business registration, application for policies, patent agency, etc.) are eligible to use sci-tech innovation coupons so that the development of start-up teams and incubators will be further facilitated.
Efforts will be made to complete the redemption of sci-tech innovation coupons within 1 month after the redemption notice is issued.
91. What kind of enterprise will be deemed as ones that have made significant contribution to epidemic prevention and control and will be recorded as sound creditworthiness? What specific favorable policies will be adopted in terms of funding support for scientific research projects and project process management?
A: In accordance with the lists of awardees and honor recipients issued by the state, Shanghai and relevant government authorities for their active participation in epidemic prevention and control, eligible enterprises shall be given sound creditworthiness status by Shanghai Municipal Commission of Science and Technology. Under equal conditions, those enterprises will be given priority in approval for project funding support application. Daily monitoring and inspections will be reduced or lifted for those enterprises throughout the project implementation supervision period.
VI. Optimization of business environment and better enterprises services
92. A lot of provisions in Shanghai’s 28 policy measures focus on SMEs. Different provisions have different application criteria. Is it possible to have one or two designated departments responsible for answering all of the inquiries?
A: Shanghai-based SMEs can make inquires with Shanghai Municipal or via Shanghai Municipal Enterprise Cloud (http://www.ssme.sh.gov.cn/).
93. Through which channels can enterprises gain comprehensive insights into Shanghai’s 28 policy measures?
A: To better promote and interpret Shanghai’s 28 policy measures and follow up on implementation, on top of existing policy release channels, mainstream media outlets have already been collecting and publicizing implementation plans and supporting policies issued by line agencies and district government, making information about policies more accessible to enterprises.
People are also encouraged to watch Shanghai’s press briefings to learn more about the updates of Shanghai’s 28 Policies Measures and its detailed implementation plans. The Information Office of Shanghai Municipality has held several press briefings on epidemic prevention and control situation to proactively release latest authoritative information.
94. Is there any official guide or operating manual for Shanghai’s 28 Policies Measures? Which measures require application by enterprises and which ones will be automatically enforced without actions taken by the companies?
A: Most of the 28 Policies are universally applicable and can be enjoyed without application from the enterprises. Polices available upon application are as follows.
Policies including support for high-tech companies in the field of COVID 19 epidemic prevention and control to be listed at the Sci-Tech Board of Shanghai Stock Exchange (No.3), rental reduction and forgiveness for enterprises (No.9), delaying in tax filing and tax incentives (No.10&11), temporarily refunding on Travel Agencies’ Service Quality Deposit and subsidies for the patrons of Cultural Sectors Development Fee (No.13), refunding on unemployment insurance (No.17), extending payment period of employee’s social security (No.19), adoption of training fee subsidy (No.20), etc. are available to enterprises upon application. Relevant authorities in charge are open for further consultation.
95. If a company, affected by the epidemic, is not able to honor the contracts it partied to or having labor disputes with its employees due to difficulty in production and operation, what are the channels for the company to seek legal counsel?
A: Shanghai Municipal Bureau of Justice has opened a green access to legal services regarding epidemic prevention and control. On top of the existing channel （Hotline12348-1 for legal counseling）, a new channel is opened (Hotline 12348-9 for epidemic-related legal counseling) and is answered by professionals such as lawyers and greffiers round-the-clock.
“http://sh.12348.gov.cn” and the WeChat public account of Shanghai Municipal Bureau of Justice also opened online counseling channel which will be responded by professional lawyers.
All three channels provide round-the-clock services free of charge.
Companies can also turn to the official websites and WeChat public accounts of district-level Bureau of Justice, notary offices, law firms, judicial authentication institutions and adjudication institutions for information and counseling.
96. In case of dispute over the implementation of a contract which is caused by the epidemic, can the litigant defend himself with claims such as force majeure or change of circumstance?
A: The litigant has the right to make his claim in the adjudication process. According to the Arbitration Law of the People’s Republic of China, the ruling of a case shall be independently made by the arbitral tribunal. For claims made by the litigant during the adjudication process, arbitration agency could call the attention of the tribunal to these claims and protect the lawful rights and interests of the litigant by referencing the guiding principles for legal issues arising from epidemic prevention and control as well as in accordance with relevant laws and regulations.
97. During the epidemic, a lot of SMEs have suffered tremendously. Is there pro bono legal service tailored for these SMEs？
A：To combat the epidemic and strengthen the role of law practitioners in serving the socio-economic development, Shanghai Municipal Bureau of Justice and Shanghai Federation of Industry and Commerce jointly issued the Implementation Plan for Pro Bono Legal Service to tide over 2020. Pro Bono legal services will be provided for the following categories of SMEs:
a. Business suffered huge impact during the epidemic;
b. Businesses played an active role in the epidemic combat by mobilizing resources and successfully delivered important supplies to the hard-hit areas. The supplies include: masks, goggles and protective clothing.
c. Businesses made donations of money and goods to the hard-hit areas
d. Businesses working overtime to produce, package and transport prevention and control supplies; business honoring their social responsibilities by continuing the salary payment to their employees;
e. Owners that run public places which are requisitioned by the government as quarantine sites during this epidemic;
f. Businesses with principle investor or legal person whose close relative have been working at the frontline as medical workers, community workers and police affairs enforcement officers.
Volunteering practitioners will, based on the specific demands of SMEs, sign pro bono agency agreement with them offerings services as follows:
a. helping SMEs sort out organizational loopholes and potential legal risks as well as build legal risk alert mechanism by looking into the operation and compliance situation during the epidemic;
b. providing epidemic-related legal counseling for SMEs (including business operation, compliance, human resources, etc.), answering their inquires, drafting and reviewing contracts and important legal documents, sending Attorney Opinion Letters;
c. solving the disputes that arise from the epidemic by provision of mediation services thus giving full play to the professional and imperial strength in mediating disputes.
Shanghai Municipal Commission of Commerce opened a new column called Online Classroom on International Trade and Economy at the internet portal of “Shanghai Fair Trade Service” and the WeChat public account of Shanghai Fair Trade. Online classes will be available in the column with subjects of great interest to the businesses, such as force majeure in international trade in goods, investigation processes in outbound trade remedy and the Economic and Trade Agreement between China and the United States (Phase I). Reputable legal service teams and scholars will be invited to record video/audio classes which will be sent, free of charge, to enterprises to help them utilize legal tool in international trade and economy with precision and build effective risk management system to cope with the influence of COVID 19.
98. What kind of notary services are free or charged at reduced rates during the epidemic prevention and control period? How to gain access to these services?
A: In order to lift the burden on enterprises and navigate them through this challenging situation, all notary offices in Shanghai pledge themselves to halving the notary fees of particular categories of services for enterprises of designated categories. Further clarifications are as follows:
a. Enterprises of designated categories include those that have difficulties in production and operation due to the epidemic and those that produce, transport and develop medical supplies for epidemic prevention and control.
b. For all the 20 items on the list of notary services that are priced by the government, including notarization on certification, contract, deposit withdrawal, legal person qualification and credit standing, etc., enterprises will enjoy a 50% fee deduction. For items excluded from the above-mentioned list, notary fees will be reduced at discretion upon negotiation between notary offices and enterprises.
99. During COVID-19 prevention and control period, can the litigants pursue their claims with arbitration agencies?
A: Shanghai’s local arbitration agencies have suspended on-site filing but litigant can still file claims online or send all the required materials via mail. Litigants can resort to the arbitration agencies for case filing through channels specified in the contracts they partied to.
100. For cases that have been successfully filed, will the tribunal be opened or will the hearings be proceeded with?
A: For arbitration cases that have already been scheduled for tribunal or hearing before the epidemic, the case clerk will inform the parties or their representatives via phone calls or e-mails whether there will be a rearrangement. Enterprises are also recommended to pay attention to the latest arrangements by arbitration institutions posted on their official websites or WeChat public accounts.
For cases that have already been granted with a tribunal but yet to confirm the trial time or hearing time, the arbitration agency will make reasonable arrangements in accordance with the epidemic situation and upon consultation with the tribunal as soon as possible.
In case of urgency for settlement or adjudication and with consents from litigants about online trial, written requests can be submitted to arbitration agencies with online trial capability. Decision will be made by arbitration agencies based on the assessment of the cases per se and the conditions of the litigants’ telecommunication facilities.
Note: The document is translated by Shanghai Municipal Commission of Commerce.
The power of interpreting any provision in this text is entirely vested in the competent departments of Shanghai Municipal People’s Government.
Should there be any discrepancy of meaning between the Original Chinese Text and the English Text, the Chinese version shall prevail.