As China combats the coronavirus outbreak, Chinese businesses are also fighting an economic battle. More than 300 companies have applied for loans from local banks in Beijing in recent days, totaling at least 57.4 billion yuan. Among the companies are a large number of technology companies, including electronics maker Xiaomi, food rating and delivery platform Meituan Dianping, ride-hailing provider Didi Chuxing. According to Reuters, the companies are likely to get fast-track approvals and preferential interest rates.
According to Yicai, Xiaomi applied for a 5-billion-yuan loan to make and sell medical equipment, including masks and thermometers. Meituan Dianping applied for a 4-billion-yuan loan to provide food delivery support for Wuhan medical staff. Qihoo 360 applied for a 1-billion-yuan loan to purchase medical-related products and develop an app related to potential infections of coronavirus. Didi Chuxing applied for a 50 million yuan loan to fend off a severe blow to its business during the outbreak.
However, it is too early to tell how desperate tech companies are for capital. According to Hong Kong Stock Exchange, Xiaomi made a profit of 8.2 billion yuan in the third quarter on a 25.2% jump in gross margins, despite slowing revenues. Meituan Dianping has also been profitable for the past two quarters.
The coronavirus outbreak has hit multiple Chinese industries hard due to manufacturing suspension combined with reduced consumption during the quarantine. Since February 6, the Beijing Municipal Bureau of Finance has taken a number of financial measures to assist enterprises in key areas related to the epidemic, including biomedicine, medical devices and medical circulation. In addition, catering, accommodation, transportation and other areas where small businesses are concentrated are also the focused of some financial support policies. On February 7, Chinese restaurant chain Xibei received a payment of 120 million yuan from Shanghai Pudong Development Bank, under the auspices of the Beijing Municipal Bureau of Finance.