Coronavirus: China’s small firms bemoan lack of support as Omicron wave threatens economic recovery
- China’s small companies are crying out for more support from Beijing as the latest Omicron wave casts a cloud over the economy
- Owners say government tax rebates do not compensate them enough for lost business caused by strict pandemic controls
Amid a surge of Omicron infections sweeping China, Tang Lin has watched business dry up at her small noodle soup restaurant in Nanning, the capital of Guangxi province in southern China.
Though the city has reported only three cases of the highly transmissible coronavirus variant since March 1, stringent pandemic controls have hit small businesses hard.
Internet cafes, karaoke parlours and bars have been forced to suspend operations, while some eateries in her neighbourhood are making less than 1,000 yuan (US$157) a day and have begun laying off staff, Tang said.
“More small business owners are trying to sell their properties in order to raise cash to pay for rent and labour, but it is hard to find buyers as the property market is sluggish as well,” said Tang.
We don’t have income, so what’s the point of a tax cut?
China announced 2.5 trillion yuan worth of tax rebates for this year. Businesses will receive a 3 per cent exemption on value added tax and some small firms will have income tax slashed to 20 per cent from 25 per cent. Small businesses will also be eligible for a 1.5 trillion yuan rebate on value added tax to ease financial burdens.