Editor's note: Two sessions in progress. March 4. China Business Journal interviewed Shen Guojun, CPPCC National Committee member, and Founder and Chairman of Yintai Group, on various issues including how to revitalize consumption and develop the real economy. The following is the full text of the interview.

“COVID-19 has had a profound impact on the retail industry and the real economy. This has been the case since winter last year when COVID-19 re-emerged in some regions; certain parts of the services sectors were badly affected.” said Shen Guojun, CPPCC National Committee member, and Founder and Chairman of Yintai Group.

Yintai Group, founded by Shen, is a diversified industrial development and investment group involved in retail, real estate, gold, tourism, investment and finance, and holds equity stakes in a number of domestic and overseas listed companies. Yintai’s growth reflects the innovation and transformation as well as good faith and responsibility of entrepreneurship advocated by Shen. These beliefs have played a significant role in helping the company respond to the COVID-19 crisis, and have guided and will continue to guide its innovative development in a post-COVID-19 world.

During the 2021 two sessions period, Shen was interviewed by a China Business Journal reporter and discussed issues related to the impact of COVID-19 on the retail sector, and how consumption should be revitalized and the real economy developed in a post-COVID-19 era.

He believed that effective control of COVID-19 would benefit the real (physical) economy, while the virtual economy would continue to prosper. From a longer term perspective, the pandemic had simply accelerated the arrival of future trends rather than made interim changes. A traditional enterprise must therefore, actively embrace change and digitalize; only then could it respond calmly to similar crises in the future.

China Business Journal: COVID-19 has had a significant impact on consumption. To what extent has the retail sector recovered? Will the impact of COVID-19 continue?

Shen: The impact of COVID-19 is profound. Although the retail sector has started to recover gradually since the second half of last year, the impact of COVID-19 has not fully abated. This is particularly the case since last winter when the virus re-emerged in some regions, adversely affecting the real economy. The F&B, department store and tourism sectors, labor-intensive services sectors, in particular, were the hardest hit.

We have now entered a normal COVID-19 prevention and control phase. Under the guidance and support of the government, many enterprises have put in place fairly sophisticated prevention and control response mechanisms. Elsewhere, as large-scale vaccination takes place, the adverse impact of COVID-19 should abate further. These are factors that will help enterprises recover their growth momentum as soon as possible. We are still very confident about recovery and growth in the economy.

China Business Journal: In your opinion, what policies and measures introduced in the past year have had a larger targeted effect on addressing the impact of COVID-19 on the consumption sector? When these support policies are withdrawn, how should the consumption industry develop?

Shen: To simulate consumption, the government issued discount coupons, and developed online consumption, which had a positive effect on spending to a certain extent. When these incentive policies are withdrawn, long-term policies that will help revitalize consumption must be introduced, such as further expanding tax exemption pilots, credit support for small and medium-sized enterprises (SMEs), and increasing resident income, to name a few. In terms of policy implementation, corresponding supporting mechanisms that can be better implemented as well as those that oversee such implementation are needed. The consumption section should also take full advantage of this window of supportive policies to actively upgrade its strength in epidemic prevention and control, and innovative consumption methods as well as actively carry out digital transformation so as to develop better and faster in accordance with the trends of the times when the pandemic ends.

China Business Journal: COVID-19 has had a significant impact on consumption. To what extent has the retail sector recovered? Will the impact of COVID-19 continue?

Shen: The impact of COVID-19 is profound. Although the retail sector has started to recover gradually since the second half of last year, the impact of COVID-19 has not fully abated. This is particularly the case since last winter when the virus re-emerged in some regions, adversely affecting the real economy. The F&B, department store and tourism sectors, labor-intensive services sectors, in particular, were the hardest hit.

We have now entered a normal COVID-19 prevention and control phase. Under the guidance and support of the government, many enterprises have put in place fairly sophisticated prevention and control response mechanisms. Elsewhere, as large-scale vaccination takes place, the adverse impact of COVID-19 should abate further. These are factors that will help enterprises recover their growth momentum as soon as possible. We are still very confident about recovery and growth in the economy.

China Business Journal: In your opinion, what policies and measures introduced in the past year have had a larger targeted effect on addressing the impact of COVID-19 on the consumption sector? When these support policies are withdrawn, how should the consumption industry develop?

Shen: To simulate consumption, the government issued discount coupons, and developed online consumption, which had a positive effect on spending to a certain extent. When these incentive policies are withdrawn, long-term policies that will help revitalize consumption must be introduced, such as further expanding tax exemption pilots, credit support for small and medium-sized enterprises (SMEs), and increasing resident income, to name a few. In terms of policy implementation, corresponding supporting mechanisms that can be better implemented as well as those that oversee such implementation are needed. The consumption section should also take full advantage of this window of supportive policies to actively upgrade its strength in epidemic prevention and control, and innovative consumption methods as well as actively carry out digital transformation so as to develop better and faster in accordance with the trends of the times when the pandemic ends.

China Business Journal: In the past one year, the Party central committee placed employment security at the center of all policies. As a frontline entrepreneur, what role do you think enterprises should play in ensuring a stable level of employment? How does an enterprise strike a balance between stable employment and business operation?

Shen: After the outbreak of COVID-19, some businesses ran into short-term difficulties. Demand for employees fell. This was particularly the case for SMEs, which play a key role in employment stability. They were under a lot of pressure to ensure employment security. To address these concerns, both central and local governments have introduced numerous policies to support enterprise development and encourage enterprises to hire more. For instance, policy measures such as rental reduction and exemption as well as preferential loans were introduced. These have had a positive impact on helping enterprises resume production as soon as possible. Ultimately however, employment can only be secure if enterprises can continue to operate and tide over a difficult business environment. Therefore, employment stability and security require first helping enterprises overcome challenges. When enterprises gain confidence in their development and have the impetus to grow, they will be able to provide more employment opportunities as their business develop and expand.

China Business Journal: From your perspective, what is the online and offline impact of COVID-19? As economic activity gradually returns to normal, what are the differences in the extent of online and offline recovery?

Shen: The impact of COVID-19 on the real economy is obvious, and will not fully abate over the short term. The outbreak of the pandemic has also propelled traditional enterprises to actively attempt online transformation. If they are able to grasp these opportunities, they may usher in new development opportunities. Online enterprises, particularly internet firms, have not been weakened by the pandemic. On the contrary, COVID-19 has triggered online demand. For instance, online education, entertainment and gaming, fresh produce e-commerce and online office have grown tremendously.

China Business Journal: COVID-19 has had a significant impact on consumption. To what extent has the retail sector recovered? Will the impact of COVID-19 continue?

Shen: The impact of COVID-19 is profound. Although the retail sector has started to recover gradually since the second half of last year, the impact of COVID-19 has not fully abated. This is particularly the case since last winter when the virus re-emerged in some regions, adversely affecting the real economy. The F&B, department store and tourism sectors, labor-intensive services sectors, in particular, were the hardest hit.

We have now entered a normal COVID-19 prevention and control phase. Under the guidance and support of the government, many enterprises have put in place fairly sophisticated prevention and control response mechanisms. Elsewhere, as large-scale vaccination takes place, the adverse impact of COVID-19 should abate further. These are factors that will help enterprises recover their growth momentum as soon as possible. We are still very confident about recovery and growth in the economy.

China Business Journal: In your opinion, what policies and measures introduced in the past year have had a larger targeted effect on addressing the impact of COVID-19 on the consumption sector? When these support policies are withdrawn, how should the consumption industry develop?

Shen: To simulate consumption, the government issued discount coupons, and developed online consumption, which had a positive effect on spending to a certain extent. When these incentive policies are withdrawn, long-term policies that will help revitalize consumption must be introduced, such as further expanding tax exemption pilots, credit support for small and medium-sized enterprises (SMEs), and increasing resident income, to name a few. In terms of policy implementation, corresponding supporting mechanisms that can be better implemented as well as those that oversee such implementation are needed. The consumption section should also take full advantage of this window of supportive policies to actively upgrade its strength in epidemic prevention and control, and innovative consumption methods as well as actively carry out digital transformation so as to develop better and faster in accordance with the trends of the times when the pandemic ends.

China Business Journal: In the past one year, the Party central committee placed employment security at the center of all policies. As a frontline entrepreneur, what role do you think enterprises should play in ensuring a stable level of employment? How does an enterprise strike a balance between stable employment and business operation?

Shen: After the outbreak of COVID-19, some businesses ran into short-term difficulties. Demand for employees fell. This was particularly the case for SMEs, which play a key role in employment stability. They were under a lot of pressure to ensure employment security. To address these concerns, both central and local governments have introduced numerous policies to support enterprise development and encourage enterprises to hire more. For instance, policy measures such as rental reduction and exemption as well as preferential loans were introduced. These have had a positive impact on helping enterprises resume production as soon as possible. Ultimately however, employment can only be secure if enterprises can continue to operate and tide over a difficult business environment. Therefore, employment stability and security require first helping enterprises overcome challenges. When enterprises gain confidence in their development and have the impetus to grow, they will be able to provide more employment opportunities as their business develop and expand.

China Business Journal: From your perspective, what is the online and offline impact of COVID-19? As economic activity gradually returns to normal, what are the differences in the extent of online and offline recovery?

Shen: The impact of COVID-19 on the real economy is obvious, and will not fully abate over the short term. The outbreak of the pandemic has also propelled traditional enterprises to actively attempt online transformation. If they are able to grasp these opportunities, they may usher in new development opportunities. Online enterprises, particularly internet firms, have not been weakened by the pandemic. On the contrary, COVID-19 has triggered online demand. For instance, online education, entertainment and gaming, fresh produce e-commerce and online office have grown tremendously.

As the pandemic gradually abates, the offline real economy will clearly benefit but the online economy will not experience a big downturn either. Rather, online activities will continue to prosper. From a longer term perspective, the pandemic has but accelerated the arrival of future trends rather than made interim changes. A traditional enterprise, therefore, must actively embrace change and digitalize; only then can an enterprise respond calmly to similar crises in the future.

China Business Journal: The Central government has given policy priority to supporting the development of the real economy in recent years. It has actively employed various measures to tilt the allocations of financial resources and social resources toward the real economy. Do you think these policies and measures have produced the desired outcome to date, and has the business environment of the real economy improved fundamentally?

Shen: At this time, the series of measures that the Central government has introduced to help support the real economy have been very pertinent. These have helped the real economy recover from COVID-19 as soon as possible, and have propelled the business environment toward continued optimization.

Nonetheless, in the surveys conducted by the various chambers of commerce, we have also noted that the sense of fulfillment of some of the industries and enterprises remain relatively weak. Financing remains a challenge for privately run SMEs, and securing bank loans, particularly medium- and long-term loans are still a problem.

As for the series of policies and resources tilted toward the real economy, if more enterprises are to benefit from them, I would advise putting more effort into building a mechanism for implementing supporting measures and into supervision.