Chinese authorities have unveiled a policy package to further stabilize the economy and better coordinate COVID-19 control and economic development.
The package, which was announced by the State Council on May 31, includes 33 detailed measures covering fiscal and financial policies, as well as policies on investment, consumption, food and energy security, industrial and supply chains, and people's standard of living. The following are highlights of the policy package.
Fiscal policies aim to:
1.Further enhance value-added tax credit refund policies. Tax rebates will reach 1.64 trillion yuan this year.
2.Quicken the fiscal spending schedule. The government will supervise and guide local governments to speed up budget implementation and disburse funds in a timely manner.
3.Accelerate the issuance and utilization of local government special bonds with a service extension. The special local government bonds issued this year, valued 3.45 trillion yuan, are expected to be sold by the end of June and the proceeds to be spent by the end of August.
4.Activate government financing guarantee policies. Newly increased re-guarantee business of the National Financing Guarantee Fund will reach 1 trillion yuan.
5.Support small and medium-sized enterprises (SMEs) in government procurement. The minimum portion of government procurement that is sourced from SMEs will be raised from 30 percent to 40 percent.
6.Defer payment of social security premiums. Five industries highly affected by the pandemic, including the food and beverage industry, retail, tourism, civil aviation, and road, water, and railway transportation are allowed to postpone payment of social security premiums.
7.nhance employment support policies. The country will increase unemployment insurance premium refunds for large-scale enterprises from the previous 30 percent to 50 percent.
Monetary policies aim to:
8.Encourage delayed repayment of capital and interest on loans for micro, small and medium enterprises (MSMEs), self-employed individuals, truck drivers, and personal housing and consumption loans affected by COVID-19.
9.Expand inclusive loans to micro and small enterprises (MSEs). Financial support offered by the policies to support inclusive loans to MSEs will increase from 1percent to 2 percent.
10.Slightly reduce lending interest rates while ensuring interest rate stability.
11.Improve the financing efficiency of capital markets. The authorities will support mainland enterprises to list in Hong Kong, and qualified platform enterprises to list overseas.
12.Increase financial institutions’ support for infrastructure construction and major projects. Policy development banks should optimize loan structures and issue more loans with longer terms.
Policies on investment and consumption aim to:
13.Accelerate approved water conservancy projects to improve water resource security and disaster prevention and mitigation capabilities.
14.Speed up investment on transportation infrastructure. The government will support China Railway to issue 300 billion yuan of railway construction bonds.
15.Continue to build urban underground utility pipelines. The central authorities will guide all localities to coordinately promote the construction of utility corridors in the renovation of old urban pipe networks.
16.Stabilize and expand private investment. The government will support 500 more specialized and sophisticated “little giants” enterprises that produce new and unique products.
17.Promote the healthy and standardized development of the platform economy. Specific measures will be issued to support the regulated and healthy development of the platform economy, and maintain order in market competition.
18.Stimulate purchases of cars and home appliances. Local governments are no longer allowed to add new restrictions on car purchases.
Policies on food and energy security aim to:
19.Increase grain profit guarantees for farmers. In addition to the 20-billion-yuan in subsidies for agricultural materials that has already been allocated, another 10 billion yuan will be provided to offset the decline in profits caused by the rising cost of agricultural materials.
20.Produce quality coal while ensuring safety, environmental protection and efficient utilization. The government will establish and improve an incentive and restraint policy mechanism for coal production.
21.Launch major energy projects. China will accelerate the construction of large-scale wind power and photovoltaic bases in the Gobi Desert and other desert areas.
22.Improve the capacity and standard of coal reserves. Make good use of qualified bank loans and special re-loans to support the clean and efficient use of coal.
23.Strengthen the reserve capacity of crude oil and other energy resources.
Policies on industrial chains and supply chains aim to:
24.Reduce utility costs for market entities. Broadband and private line tariffs for MSMEs will be decreased by 10 percent.
25.Gradually reduce and exempt market entities’ rent. MSEs and individually owned businesses in the service industry that rent state-owned facilities will enjoy rent reductions for 3-6 months.
26.Ease the burden on sectors and companies severely affected by the pandemic. The aviation industry will issue 200 billion yuan of bonds with government support.
27.Optimize enterprises' work resumption. Establish whitelist mechanisms for companies to resume production.
28.Optimize transportation and logistics policies. Completely cancel the pandemic prevention traffic restrictions on freight vehicles from low-risk areas.
29.Give more support to logistics hubs and enterprises. Approximately 5 billion yuan in funds will be allocated in the central budget to support cargo distribution, warehousing, transportation and emergency support capacities in key hub cities. Approximately 2.5 billion yuan will be allocated to support the construction of the agricultural produce supply chain.
30.Prioritize major foreign-funded projects to attract additional foreign investment. Guide foreign investors to invest more in advanced manufacturing and technological innovation.
Policies on people’s standard of living aim to:
31. Implement support policies for housing provident funds. Depositors affected by the pandemic who are unable to repay the housing provident fund loan normally will not be treated as overdue and their credit scores will not be affected.
32. Bolster the employment and entrepreneurship of rural migrant population and rural labor. The Central Government will allocate approximately 40 billion yuan for those moving to cities from rural areas to engage in non-agricultural industries on a long-term basis.
33. Enhance social security guarantee measures. The government will guide all localities to distribute subsidies in full and in a timely manner to ensure the basic living conditions of low-income groups.
($1=6.7 yuan. Figures included are for the year 2022)
Copyedited by G.P. Wilson
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