Package of measures to get China’s economy back on track – Xinhua English.news.cn
Staff members work at the workshop of Anhui Electric Power Transmission & Transformation Co., Ltd. in Hefei, east China’s Anhui Province, May 13, 2022. (Xinhua/Liu Junxi)
BEIJING, May 25 (Xinhua) — China’s cabinet has called for the implementation of a comprehensive policy package, which is expected to get the country’s economy back on track amid downward pressure and resolve the difficulties faced by market entities, according to experts.
China will implement 33 measures in six areas, mainly fiscal and related measures, to stabilize economic performance, according to a recent State Council executive meeting.
“The set of proposed policies is broad, relevant and timely,” said Wang Yifeng, analyst at Everbright Securities. The mix coordinates fiscal, financial and industrial policies and aims to minimize COVID-induced impacts on the economy.
Faced with the current situation, the government has sought to adopt proactive fiscal policies that prioritize employment and economic stability, according to Zhang Yiqun, an expert with the China Public Finance Society.
The meeting chose to expand the country’s policy of refunding current and new value-added tax credits to more industries, which is expected to increase tax refunds by more than 140 billion yuan (21, 03 billion dollars).
It also decided to postpone until the end of the year the payment of old-age, unemployment and occupational pension insurance premiums for micro, small and medium-sized enterprises (MSMEs), self-employed households and businesses in five hard-hit sectors. affected: catering, retail trade, tourism, civil aviation as well as road, river and rail transport. Deferred payments this year are expected to reach 320 billion yuan, covering the five troubled sectors and other industries.
Zhang said the tax policies will free up cash for companies related to bonus payments as much as possible and free up more capital for them.
Zhang also said he expects the bonus payment deferral policy to extend to companies contributing to efforts to stabilize employment, foreign trade and prices, as well as those in the industries. coal, power generation and new energies.
The meeting pointed out that this year’s local government special bond funds will be mostly utilized by the end of August, with their scope of support extended to new infrastructure and other projects.
The instruction urged the accelerated use of special bonds and sent a signal that new infrastructure is likely to replace traditional infrastructure as an investment target in the future, while relaxing the scope of special bonds to increase investment returns, Zhang said.
The meeting also announced that the re-guarantee business of the national financing guarantee fund will be increased by more than 1 trillion yuan this year.
China’s State Council approved the establishment of the national financing guarantee fund in April 2018 to ease the financing problems of the real economy and small businesses.
Zhang said the measures take full advantage of tax leverage to boost small businesses’ financing capabilities and help them overcome their current difficulties.
The meeting resolved to double the scale of the Micro and Small Enterprise Inclusive Lending Support Facility, as well as its share in increasing the loan balance.
Banks will be supported to defer, during this year, repayments of principal and interest on loans granted to MSMEs and self-employed households, truck loans, housing loans and consumer loans owed by people facing temporary difficulties.
Noting that some residents and businesses have seen their income decline due to COVID-19 and are therefore unable to repay their loans, CITIC Securities chief analyst Ming Ming said the financial arrangements were appropriate, timely and accurate.
Zhou Maohua, an analyst at China Everbright Bank, said the expansion of the bank support facility is mainly in place to deal with the complex economic environment.
The move strengthens support for small and micro enterprises, revives the vitality of market entities and accelerates the economy’s return to normal, Zhou said. ■