Hundreds of Chinese companies are seeking bank loans totalling at least CNY57.4bn ($8.2bn) to be able to deal with the shock of the coronavirus epidemic.
More than 300 firms, including some of China’s largest companies, are seeking new funding that would enable them to manage the coronavirus outbreak.
Many of the businesses seeking loans—including China’s dominant ride hailing service provider, Didi Chuxing Technology, Megvii Technology, and Qihoo 360 Technology Co—were either involved in the control of the epidemic or were the hardest hit.
The government is active in providing assistance to businesses. Lists of companies in need of loans have been sent to banks by the Beijing government finance bureau.
Reports indicate that the companies requesting loans in the Chinese capital will most likely be put on an accelerated track and receive preferential treatment.
Banks will have the final say on lending decisions. And the interest charged will probably be within the range offered to the banks’ top clients.
The loans are much needed
The money from many of the loans requested will be used to address vital epidemic-related needs.
Xiaomi, the world’s fourth-biggest smartphone maker, is seeking 5 billion yuan ($716.24 million) in loans to produce and sell medical equipment including masks and thermometers, according to the lists.
Meituan Dianping, China’s largest food delivery company, is seeking 4 billion yuan ($572.99 million), partly to help finance free food and delivery to medical staff in Wuhan, the epicenter of the outbreak in central Hubei province.
Privately held Didi Chuxing, “severely impacted by the virus outbreak”, is seeking 50 million yuan ($7.16 million).
China struggles to contain the epidemic
China is struggling to contain the coronavirus outbreak.
Authorities have cordoned off cities, suspended transport links and shuttered facilities where crowds gather, hammering economic growth which one senior economist said may slow to 5% or less in the first quarter.
As we go to press, the coronavirus has infected 40,235 people and killed 909 people in China alone. Outside China 319 people have been infected, in 24 countries, and one person has died.
The overall pattern of the epidemic has not changed: 99% of all cases remain in China.