Companies are in a race against the clock to stay afloat as cash reserves are dwindling. FMTNews Chinese
A branch of China Construction Bank temporarily closes due to virus outbreak in Hong Kong. Her firm’s 100 outlets have been closed for about a month because of the coronavirus, cash reserves are dwindling and banks are reluctant to extend deadlines on billions of yuan in debt coming due over the next few months. There are also other creditors to think about.
While China’s government has cut interest rates, ordered banks to boost lending and loosened criteria for companies to restart operations, many of the nation’s private businesses say they’ve been unable to access the funding they need to meet upcoming deadlines for debt and salary payments. President Xi Jinping over the weekend pledged a greater focus on reviving the economy, with a more proactive fiscal policy, accelerated construction projects and freer reserves for commercial lenders to unleash more funding.
To put that into perspective, China’s small businesses typically face interest payments on about 36.9 trillion yuan of loans every quarter. Many of China’s businesses were already grasping for lifelines before the virus hit, pummeled by a trade war and lending crackdown that sent economic growth to a three-decade low last year.
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