Firms in China seek billions in loans amidst coronavirus outbreak

Above 300 Chinese firms are seeking bank loans totalling at least 57.4 billion Yuan ($8.2bn) to help soften the impact of the coronavirus outbreak in China, said banking sources.

Authorities have cordoned off cities, suspended transport links, and shuttered facilities where crowds gather, hammering economic growth that one senior economist said could slow to five percent or less in the first quarter of 2020.

 The companies seeking loans in the Chinese capital are likely to get fast-track approvals and preferential rates, said the sources, who received copies of two lists of company names sent to banks in Beijing by the city government's finance bureau.

Though there is no official data so far showing the total loans Chinese companies are seeking nationwide to weather the outbreak.

The two lists also contained the size of loans sought by the firms, which include pharmaceutical firms and restaurants.  As per bureau, firms seeking financial support could ask for its help.

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 is seeking 4 billion yuan ($572.99 million), partly to help finance free food and delivery to medical staff in Wuhan, the epicentre 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).

Facial Recognition

Facial recognition startup Megvii applied for 100 million yuan ($14.32 million) to develop new technology including means to improve the accuracy of identifying individuals with masks in crowds.

Beijing-based Megvii has sought to raise funds via an initial public offering in Hong Kong, but faces headwinds from a U.S. trade blacklist over its alleged involvement in human rights violations related to Beijing's clampdown on Uighurs in China's Xinjiang region. The company said at the time it "strongly objected" to the U.S. move.

To help combat the impact of the virus, China's central bank has injected cash into the banking system to shore up market confidence. The banking and insurance watchdog has also urged lenders to lower interest rates.

The local bureaus of the National Development and Reform Commission (NDRC), the top economic planner, and the Ministry of Industry and Information Technology (MIIT) are also compiling lists of affected companies and offering them support.