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China Touts 33 Measures in Latest Push for Economic Relief

China Touts 33 Measures in Latest Push for Economic Relief
© Bloomberg. A closed subway station entrance in Beijing, China, on Monday, May 23, 2022. Beijing reported a record number of Covid cases during its current outbreak, reviving concern the capital may face a lockdown as authorities seek to stamp out community spread of the virus.

(Bloomberg) — China’s cabinet introduced 33 policies on Monday to support businesses and consumer spending as economic activity is hammered by the country’s worst Covid outbreak since early 2020. 

The State Council’s measures, which total tens of billions of dollars worth of relief, include stimulus intended to aid companies that have buckled under the weight of the outbreaks and anti-Covid curbs, along with tools to boost infrastructure investment and improve supply chain disruptions. 

Here are the specific measures detailed so far from that State Council meeting, as reported by the official Xinhua News Agency:

Fiscal Push

A plan to extend value-added tax rebates to more industries, which will increase tax refunds by over 140 billion yuan ($21 billion) and boost overall tax relief this year to 2.64 trillion yuan from 2.5 trillion yuan originally announced in March
The government will extend a policy allowing small businesses and companies in five Covid-stricken industries to defer payments on some social insurance programs until the end of the year. The policy will also be expanded to cover more struggling industries, resulting in 320 billion yuan worth of deferred payments in 2022
The government will expand a previously announced cash subsidy so more struggling companies can retain their employees. The program will apply to all firms participating in an official unemployment insurance program that are having difficulties, instead of just the small businesses covered previously
A pledge to provide incentives such as subsidizing social insurance contributions for small businesses that hire college graduates
A call on local governments to provide greater support to small businesses, including subsidies for utility expenses and rentals
The government plans to utilize basically all of the funds from this year’s local government special bond program by the end of August to support a greater scope of projects, including so-called new infrastructure such as high tech and 5G
A goal to increase the National Financing Guarantee Fund’s re-guarantee business by over 1 trillion yuan this year. The program is mainly used to support financing of small and agricultural businesses

Financial Support

The central bank will double the scale of an existing tool that provides funds to banks to encourage lending to small businesses
A pledge to support banks to defer principal and interest payments within this year on small business loans and truckers’ car loans, as well as mortgages and consumer loans for individuals experiencing temporary difficulties
A call to defer principal and interest payments on 90 billion yuan worth of commercial truck loans extended by central government-owned carmakers
A promise to cut the payment period of commercial acceptance bills to six months from one year, which would spur the big firms that issue such bills to pay their suppliers sooner
A pledge to encourage overseas listings for internet platform companies, in accordance with laws and regulations

Supply Chains

A pledge to fine-tune policies to help companies resume production and improve services for companies included on “white lists,” which allow firms to operate during Covid outbreaks
A promise to keep freight logistics smooth, remove restrictions on the movement of trucks in regions deemed at low-risk of Covid outbreaks, and scrap all unreasonable fees and requirements, such as height limits
Drivers of passenger and cargo vehicles will be able to have free access to Covid testing when traveling to other regions
The amount of emergency loans to airlines will be increased by 150 billion yuan and the industry will be supported to issue bonds of 200 billion yuan
A plan to increase domestic and international passenger flights in an orderly manner, and roll out measures to facilitate the travel of foreign companies’ employees

Consumption, Investment

The government will relax car purchase restrictions and reduce purchase taxes on some passenger cars by 60 billion yuan
A reiterated pledge to encourage cities to adopt their own policies to meet the needs of residents to have basic housing or to improve their housing conditions
The government will start constructing projects for irrigation facilities, transportation facilities and residential community renovation, and guide banks to provide long-term loans
A pledge to start a new round of rural road construction projects
A promise to support the issuance of 300 billion yuan worth of railway construction bonds

Energy Safety 

A call on local governments to fulfill their responsibilities for maintaining coal output
A promise to accelerate procedures for coal mine operations, thus ensuring supply, and to fine-tune policies for approving coal mines’ increased capacity
A plan to start constructing a batch of new hydro power and coal-fired power projects

People’s Livelihood

A promise to provide due benefits for the unemployed and those with low income
A plan to link social benefit standards with price inflation, should the situation require

©2022 Bloomberg L.P.

Source: Investing.com

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