The Chinese government continues taking radical measures to support the fight against the novel coronavirus epidemic that has engulfed the country. One of the recent steps has been Chinese Central Bank’s injection of 300 billion yuan into the economy through its medium-term lending facility.
Chinese media outlets report that over 300 companies in Beijing have already applied for 57.4 billion yuan in loans from local banks. Among those are the Chinese smartphone and AIoT king Xiaomi, seeking 5 billion yuan and the delivery giant Meituan Dianping, requesting a 4 billion yuan loan. The information gave birth to a heated debate on “large corporations robbing mid-sized enterprises of life-saving money” on Chinese internet.
In a comment to Sina Financial Research Institute, the Central Bank stated that it had taken note of the situation, and was coordinating the relevant departments to look into it and take measures in case any violations are detected. The Central Bank denied that Xiaomi and Meituan are on the list companies receiving preferential policies offered by Ministry of Industry and Information Technology.
However, the Central Bank also stated that if Xiaomi and Meituan did need loans for participating in the epidemic prevention and control efforts, they would definitely receive loan support. The companies would also qualify for preferential interest rates if they met certain requirements. “For example, some auto companies have recently used their production capacities to process products needed for epidemic prevention and control such as medical protective clothing. If a loan is needed for this, they can also be included in the list for support,” said a representative of the Central Bank.
Xiaomi Group is currently applying for special loans through its multiple subsidiaries, while Meituan is also seeking financial support and is likely to receive it at least in Hubei province. Nonetheless, representatives of the Central Bank also pointed out that even if approved, the loans will be far smaller than the 4 billion and 5 billion yuan sought by the companies.