Comparative Analysis of Small Business in the PRC and Russia: the Influence of the World Pandemic of COVID-19

This work provides comparative analysis of small business in the People’s Republic of China and Russia during the COVID-19 pandemic. To achieve this goal, the paper first looks at the pre-pandemic state of small businesses in both countries, and then compares the policies, which were implemented during the pandemic. Lastly, the research uses original interviews with small business owners in both countries, in order to understand better the effect, the policies had on the small businesses. This work uses qualitative research methods, such as analysis of primary and secondary sources and the interview method. The research found the clear dissimilarity between state of small businesses in China and Russia pre-pandemic. Chinese businesses were in a more favorable position, having a firmer foundation, upon which they can rely, while Russian small businesses were in a worse position economically. The research found out the main differences in the government policies of support for small businesses during the coronavirus pandemic in China and Russia. China’s government support towards its small businesses is characterized by the shorter time frame of releasing the bulk of the supportive government decrees: end of January – April 2020; by the more focus on the passive measures of support, such as tax cuts, tax exemptions, exemptions from paying for utilities and rent; by the relying on cooperation with banks on state and local levels, as well as regional authorities for providing support for small businesses. Russia’s government support towards small businesses in the country can be characterized by the longer time frame of releasing policies: March – June 2020, October – November 2020, and possible new measures in the Summer-Autumn 2021; by focusing more on subsidizing, providing soft loans and financial gratuitous help to small businesses (however applying the tax cuts and payment exemptions, as did China); by having the state government handle the distribution of the financial support. The interviews, conducted for this paper, showed that most of the interviewed business owners either were not affected negatively by the pandemic, or are recovering\have recovered from it. Only businesses, which were or are hurting, are those relying on international connections. Business owners in both countries think, that the policies were helpful, despite having bureaucratic barriers.