Missed our financial webinar? No worries! Here’s a summary of the key points:
On March 19th PTL Group collaborated with the CBBC (China-Britain Business Council) to host a webinar, aimed at clarifying any uncertainty over China’s various governmental support policies, and providing financial advice for SMEs, coping with the current operational hurdles posed by the coronavirus.
- Weifeng Ma – director of China Outbound at CBBC
- Jun Peng – China Marketing & BD Director at PTL Group
- May Zhang – CFO at PTL Group
Introduction to government measures to support SMEs in China
Both Chinese central government and local governments have issued support policies for SMEs fighting the COVID-19:
Central government policies
- Tax deduction on any donations, so long as said donations are used for fighting the virus.
- A 3 years extension on the carry-over period for losses, for any companies in the transportation, catering, accommodation and tourism industries.
- IIT exemption, for medical supplies.
- Financial support from local government and financial institutions is encouraged and allowed (such as preferential interest rate etc.)
- 2% VAT reduction for small taxpayers, over a 3 months period.
- VAT exemptions on any income generated from public transportation, lifestyle and courier services.
Shanghai Government policies
A brief outline of 4 out of the 28 actions recently issued by the Shanghai Government:
- A 3 months postponement of any increases in social insurance contributions.
- Exemption, reduction and delay of social insurance payments (unemployment and medical insurances).
- 95% tuition fee reimbursement for any online training of staff.
- 2 months’ rent exemption, for shanghai based state-owned properties
Note that different districts in Shanghai have added more policy measures, so it is advisable for each company in Shanghai to check if they’re eligible for more benefits.
Financial plans for the next 6 months
Financial advice based on lessons learnt from the coronavirus epidemic:
- Project your income in the coming half year by reviewing newly signed contracts; assessing existing and retainer contracts; there may be a need to adjust business strategies if necessary.
- Mitigate losses by raising prices in case your supply chain costs are higher; restructuring and re-allocating labor; accommodate marketing platforms to match availability of public attention.
- Maintain a healthy cash flow by reviewing receivable and payable accounts; reviewing the inventory; calculating the predicted cash flow for the next 6 months; creating an emergency cash pool.
- Prepare a balance sheet based on your current situation and use it when talking to banks or investors.
- Form an emergency team, to orchestrate efficient and responsive business management when faced with crises both at present and in the future.
For the last part of the webinar, we were holding a lively discussion with the participants, who showed a lot of interest and curiosity in the matters at hand. The Q&A session revolved around their concerns regarding cash flow, financial support claiming procedures, money-saving and adjustments of management styles in China.
Learn more about financial services in China. Our financial team is always at your disposal, and we would love to help with further inquiries.
The PTL Group team