After the outbreak of COVID-19, many small and micro enterprises experienced difficulties. Currently, signs of recovery have begun to show as regions across the country have started to resume work and production. To keep production safe and stable, Ye Tanglin, executive deputy director of the Academy of Metropolis Economic and Social Development shares his views on how to motivate multiple social forces and encourage the capability of companies’ to innovate.

In China, the status quo of small and micro businesses varies across regions. What impact will the epidemic cause for them?

Ye Tanglin: The safety risks that concern small and micro businesses reference three aspects. First, these companies could overdue their orders and face the risk of violating contract terms. Since laborers are yet to resume work, some orders that were previously negotiated cannot be delivered on time. The second form of risk comes from affiliated companies. Any “disconnection” of the links on the industrial chain will impact the operation of other companies. Third, after production restarts, relevant departments may face the risk of accountability because of inadequate precautions.

In response to the abovementioned potential risks, governments should issue guidance on risks to companies caused by delay on orders and pay attention to small and micro enterprises facing difficulties. Relevant departments should thoroughly investigate and research all the links on the industrial chain that may hinder production so that they can make targeted solutions to problems. Companies that have resumed work should strictly implement epidemic prevention and control. For example, people in charge of dedicated positions are responsible for internal epidemic prevention and control. Companies should establish internal accountability and punishment mechanisms for behaviors that run contrary to epidemic prevention and control.

To encourage small and micro companies to resume production, what should party committees and government at all levels and other relevant forces do?

Ye Tanglin: Currently, corporations, if they want to go back to production, face the practical problem of coordinating multiple regions and departments, notably impacting the normal operation of the industrial chain. For example, local governments at all levels should take the initiative to establish a communication and coordination mechanism for interconnected companies in the industrial chain, speed up the flow of funds among these companies, and reduce risks caused by a lack of short-term cash flow and financing difficulties.

What kind of support can the government, society and companies give to the employees who work for small and micro businesses and are who are affected by the epidemic?

Ye Tanglin: Small and micro companies are “reservoirs” for absorbing labor employment. At present, small and micro enterprises have been affected by the epidemic. The government’s support for migrant laborers should focus on the following aspects. First, they should begin construction projects to meet the urgent need for local development, such as renovating and upgrading facilities in hospitals and equipping isolation systems in appropriate locations. These projects should give priority to the use of local laborers. Second, they should provide more information and guidance for laborers who want to seek jobs away from home after the epidemic. For unemployed white-collar employees working in other places, the government should introduce policies to support entrepreneurship, encouraging people to innovate and start businesses. Also, the government should create temporary jobs that are open to the people who have lost their jobs during the outbreak.

Under the immense pressure brought by the epidemic, can small and micro companies continue to maintain vitality in innovation and entrepreneurship? How should they grasp and use new business forms highlighted during the epidemic, and thereby realize transformation and development?

Ye Tanglin: Compared with large and medium-sized enterprises, small and micro businesses have the advantages of small size, easy transformation, quick response to market opportunities and strong ability to seize opportunities. The epidemic has brought many innovative opportunities for development to small and micro-enterprises. For example, the service industry of large cities in the epidemic has been tremendously affected, creating greater market opportunities for the unmanned business model. Besides all this, the epidemic has created opportunities for development for small and micro enterprises in the fields of online offices, online education, telemedicine and other industries.

This article was edited and translated from Guangming Daily.

(Edited and translated by Ma Yuhong)