Highlights of Chinese policies supporting economic recovery

BEIJING -- China's economic recovery continues to gather steam as the country has rolled out a series of policies and measures, including providing more financial support and tax reduction, as well as promoting foreign trade and consumption to revive the coronavirus-battered economy and boost employment.

The following facts and figures highlight how the country is forging ahead in resuming work and production and pushing its economy on a recovery track.

CREDIT SUPPORT

The People's Bank of China, the central bank, devised two credit instruments in early June: the loan extension support tool, which aims to encourage banks to defer businesses' inclusive loan repayments, and the credit loan support tool, which is designed to step up loan issuance.

As an indication that the effects of the two instruments have become visible, outstanding inclusive loans for small and micro businesses hit a record high at the end of July by going up 27.5 percent year on year.

Rather than tipping the monetary policy into quantitative easing, the country called on financial institutions to concede 1.5 trillion yuan (about 221.6 billion U.S. dollars) worth of their profits to companies in a bid to directly channel funds into the real economy.

TAX AND FEE CUTS

The orderly implementation of China's tax and fee cut policies has helped invigorate market entities and strengthen the sustainability of enterprises' development. In the first half of the year, China's tax and fee cuts totaled over 1.5 trillion yuan. For 100,000 key tax source enterprises, tax and fee burdens dropped by 0.65 yuan per 100 yuan of the operating revenue.

Since the COVID-19 outbreak, the country has lowered employers' contributions to social security schemes for old-age pensions and unemployment and workplace safety, and refunded unemployment insurance premiums to alleviate enterprises' burdens.

Other fee-slashing moves include waiving road and expressway tolls, cutting electricity and gas rates for enterprises, and extending the loss carry-forward period from five years to eight years for sectors hard hit by COVID-19, such as transportation, catering, and tourism.

JOBS FIRST

While employment was affected by the epidemic during the first several months of the year, China has continued efforts to support employment through multiple channels, including ensuring jobs for key groups, such as college graduates and migrant workers, and catalyzing entrepreneurship and innovation.

Measures have also been taken to boost employment for people working in new forms and models of businesses and strengthen protection for flexible employment, including individual businesses, part-time jobs, and new types of employment.

The country created around a million urban jobs on a monthly basis recently, compared with only 390,000 new jobs in February, when the epidemic severely hit the country. In the first half of this year, China added a total of 5.64 million urban jobs, accounting for 63 percent of the annual target.

FOREIGN EXCHANGES

China has rolled out a series of policies to mitigate the impact of COVID-19 on foreign trade and supply chains. Official data showed China granted export tax rebates or exemptions worth 812.8 billion yuan in the first half of the year to relieve financial pressure on companies.

Amid rising concerns of coronavirus contamination in supply chains, Chinese customs had inspected more than 500,000 cold-chain samples for COVID-19 as of Sept. 7, covering frozen foods, packaging, and containers. Cold food exporters that failed a COVID-19 nucleic acid packaging test twice would be blocked from shipping to China for a week, while those that failed it three times would be frozen out for a month.

Aiming to balance epidemic control and economic and social development, China's civil aviation regulator introduced a reward and suspension mechanism, with detailed policies for the carriers to increase or suspend flights. From early June, China's civil aviation regulator adjusted policies for international passenger flights, allowing more foreign carriers to resume flights to China on a once-a-week basis while suspending an airline's flights for a week if the number of passengers testing positive reaches five.

SPENDING STIMULATING

Buoyed by the recent boost in consumer sentiment, the country's consumption will continue to rebound. Favorable factors include continued government policy support, new promotion measures by enterprises, and increasing consumer confidence.

For example, the National Consumption Promotion Month kicked off on Sept. 9 and will continue for the entire month. During the promotional campaign, over 10,000 key enterprises and major e-commerce platforms in large and medium-sized cities of 31 provincial-level regions across the country will host a series of promotional activities, which will integrate online and offline modes, goods and services marketing, as well as sectors including commodity, travel, culture, and entertainment.

Local governments and merchants have issued different types of vouchers, amounting to hundreds of millions of yuan, to boost consumer spending. Each yuan of such government subsidies could add new consumption of 3.5 to 5.8 yuan, according to an estimate from the Guanghua School of Management, Peking University.