China's zero-Covid policy tests small businesses in a make-or-break it year
BEIJING — While China tries to shake off omicron, the country's zero-Covid policy of swift lockdowns sets small businesses up for a third year of stop-and-start uncertainty.
It's a critical time for that portion of China's economy. Medium- and small-sized businesses in the country have an average lifespan of three years, the People's Bank of China said in 2018, before the pandemic.
Although state-owned corporations play a significant role in China's economy, it's the smaller, non-state-owned businesses that account for the majority of national growth and jobs.
As the Covid situation worsened this year, central and local governments issued some support measures —such as rent waivers and tax refunds for certain affected small businesses, especially in services industries.
Shanghai, which is in a two-part lockdown this week, announced about 140 billion yuan ($21.88 billion) in tax relief, according to state media.
But many small businesses «don't have any income, so cutting taxes and fees doesn't work anymore,» said an economic analyst, who requested anonymity in order to speak freely about the Covid policy's impact on growth, currently a sensitive topic in China. That's according to a CNBC translation of the Chinese.
Businesses are looking to government policies for a clearer sense of whether it's worth sticking it out for another year, the analyst said. Right now «small businesses don't have enough confidence. They can't see how the pandemic will pass.»
China's Ministry of Commerce wasn't immediately available for comment ahead of a weekly Thursday afternoon press conference. The Ministry of Industry and Information Technology did not immediately respond to a request for comment.
Mainland China is trying to control its
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