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Xinhua Silk Road
Policy

Zoom-in: China's supportive measures to enliven economy amid epidemic

February 25, 2020


Abstract : As positive signs started emerging in China's battle against the novel coronavirus disease (COVID-19) outbreak, the country has adopted a more precise and targeted approach to minimize the impact on the economy while keeping up efforts against the epidemic.

BEIJING, Feb. 24 (Xinhua) -- As positive signs started emerging in China's battle against the novel coronavirus disease (COVID-19) outbreak, the country has adopted a more precise and targeted approach to minimize the impact on the economy while keeping up efforts against the epidemic. Followings are the latest moves:

WORK RESUMPTION

-- Local authorities are ordered to take region-specific approaches when advancing resumption of work and production based on local health risks, according to decisions at a central authorities meeting.

-- Regions with relatively low risks should focus on preventing imported cases and comprehensively restoring the order of production and life. Medium-risk regions should promote work and production resumption in an orderly manner based on local situations, while high-risk regions should continue to be fully committed to epidemic prevention and control.

MONETARY POLICY

-- China will implement the "dynamic adjustment" of targeted reserve requirement ratio cut policies in the near future for better use of inclusive financing to shore up the virus-hit economy, according to the People's Bank of China, the central bank.

-- The central bank issued special reloans of 300 billion yuan (42.7 billion U.S. dollars) to provide preferential interest rate credit support to key enterprises engaged in epidemic prevention and control work.

-- Meanwhile, the financial authorities instructed lenders to roll over the loans of companies that have trouble repaying their debts as a result of the outbreak, which also rolled out preferential policies in loan risk classification for impacted industries such as catering and tourism.

As the coronavirus epidemic impact weighed on the economy, the country's banking regulator vowed to moderately raise its tolerance for non-performing loans from local financial institutions with adequate provisions to cover bad loans and capital adequacy ratio remaining high.

-- The central bank also pledged a big increase in the issuance of special bonds to provide sufficient funds to commercial lenders for supporting smaller enterprises.

FISCAL MOVES

-- Facing the potential economic shock, China's fiscal authorities have pledged to make fiscal policies more proactive to shore up the economy and alleviate the corporate burden, especially to help those smaller firms pull through.

-- The Ministry of Finance has allocated 1.85 trillion yuan worth of new local government bonds ahead of schedule so far this year to shore up the economy.

-- Tax and fee cuts have been offered to industries heavily impacted by the epidemic such as transportation, catering and tourism, as well as those supporting people's daily life such as public transport and courier services.

-- The government has decided to temporarily exempt social insurance payments and defer the collection of housing provident funds to ease enterprises' cash strain and ensure stable employment.

EMPLOYMENT

-- Policies have been rolled out to prevent employers from cutting jobs through measures like lowering unemployment insurance and supporting vocational training.

-- The authorities have given priority to helping the poor resume work and provide timely assistance to those having difficulties finding jobs due to the epidemic via ways such as putting them on public service positions.

INSURANCE SUPPORT

-- Chinese insurers have donated 11.58 trillion yuan worth of insurance to frontline personnel fighting the epidemic.

Insurance companies have set up green channels to process the claims for COVID-19 patients, simplified the procedures of settlement and provided online settlement services.

-- The current insurance claims of property insurance companies involving the novel coronavirus epidemic stood at 24.6 million yuan, while 6.57 million yuan of the total amount was for frontline medics.

FOREIGN ENTERPRISES

-- The ministry of commerce has pledged to facilitate foreign-invested enterprises to resume production, especially to those industrial leaders to keep global supply chain stable.

-- Particular support would go to large foreign investment projects, helping foreign investors solve their difficulties and minimize the impacts of the epidemic.

-- Efforts will be made in further opening-up by improving the use of foreign investment in sectors including telecommunication, medicare, education and financial services while shortening the foreign investment negative list in pilot free trade zones and nationwide.

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Keyword: China economy work resumption policy

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