China’s Support Policies for Domestic & Foreign Businesses in the Covid-19 Pandemic Era

To cushion the economic hit caused by the COVID-19 outbreak, China’s central and local governments have been rolling out a series of supporting policies to shore up the confidence of businesses and ease some of their compliance burdens. Businesses in China, including foreign-invested enterprises (FIEs), can leverage these special policies to overcome the difficulties caused by COVID-19.


In 2020, we see opportunity and fast development in capital markets, investment, insolvency and restructuring, IP, anti-trust, and dispute resolutions. Since people are adopting the remote life and working style, data protection and compliance requests soar, attracting lots of attention.


The state council executive meeting, 18th of February, 2020

Phased reduction and exemption of corporate social insurance fees and implementing the policy of payment delaying of housing fund by enterprises: “In order to reduce the impact of the epidemic on enterprises, especially small and medium-sized enterprises, in all provinces except Hubei province from February to June, small and medium-sized enterprises can be exempted from endowment insurance, unemployment insurance, and industrial injury insurance, and from February to April, large enterprises can be reduced by half; Hubei Province can be exempted from February to June for all kinds of insured enterprises. At the same time, before the end of June, the enterprise can apply for delaying the payment of the housing provident funds. During this period no overdue treatment will be made for the provident fund loans that the employees fail to repay normally due to the impact of the epidemic.”


State Council: Introducing Strong Financial Measures to Help Smaller Firms Resume Production and Operation (CN/EN) The State Council executive meeting on February 25, 2020, unveiled a string of measures to support SMEs. For eligible SMEs, financial institutions will be encouraged to provisionally defer their principal loan repayments. Their interest payments can be deferred to June 30, with penalty interest payments exempted.


Employment Matters

Since the outbreak of severe acute respiratory syndrome coronavirus 2 (“COVID-19 virus”) and the adoption of response measures by government authorities at national, provincial, and municipal levels, manufacturers have probably most focused on employment issues, such as the resumption of work, levels of compensation, and, sometimes, layoff options. Over the past six weeks, PRC authorities at the national and local levels have issued guidance for employers with respect to the resumption of work and the entitlements of employees. On January 24, 2020, the Ministry of Human Resources and Social Security issued the Notice on Labor Relations under the COVID-19 Situation (the “Labor Notice”)


In essence, the pandemic won’t reshape international relations, but it will accelerate history. Besides the impact of COVID-19, we should fully realize the pressure from the structural competition between China and the U.S. and the bump of deglobalization and respond accordingly.


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