China has unveiled a slew of fiscal and monetary incentives to help small and medium-sized enterprises (SMEs) to mitigate the impact of the novel coronavirus disease (COVID-19).
The following are the latest measures as part of the country's targeted toolkit to tide over the difficulties.
LIQUIDITY BOOST
-- The China Banking and Insurance Regulatory Commission on Sunday urged financial institutions to defer loan principal repayments that have matured since Jan. 25 for virus-stricken smaller businesses. Their interest payments between Jan. 25 and June 30 can also be deferred to June 30, with penalty payments exempted.
-- Apart from enjoying the deferment policy, enterprises in the hardest-hit province of Hubei shall be given a special credit quota, so as to lower the comprehensive financing cost in 2020 by over one percentage point from last year for small and micro-enterprises.
-- On Feb. 28, the country vowed to guide financial institutions to issue extra low-interest loans totaling 300 billion yuan (around 43 billion U.S. dollars) to self-employed businesses.
-- The country's central bank increased the re-lending and re-discount quota by 500 billion yuan last week, with the bulk channeled to small and medium-sized banks to increase their credit support to smaller businesses.
-- National commercial banks will be encouraged to offer more loans to micro and small firms, and work toward lowering the lending rates for such firms from last year's level.
-- Policy banks will add a 350-billion-yuan special credit quota to be issued to micro, small and medium-sized firms at preferential rates.
TAX AND FEE INCENTIVES
-- Self-employed businesses will see a cut in their social insurance contributions, rent and value-added tax burdens, according to the Ministry of Finance.
-- China has issued policies such as lower financing guarantee fees to alleviate the high financing costs of small and micro-enterprises.
-- Small and medium-sized enterprises outside Hubei will be exempted from pension, unemployment and work-related injury insurance premiums from February to April, according to the Ministry of Commerce.
-- The country's top economic planner said last week it will release more targeted tax and fee cuts to aid smaller businesses as they were among the hardest hit by the novel coronavirus outbreak.
EMPLOYMENT SUPPORT
-- The Ministry of Human Resources and Social Security has encouraged online hiring and provided financial support for small firms to ensure stable job creation.
-- Measures such as arranging online job fairs and providing employment training services have been unveiled to aid key groups of job-seekers including college graduates and rural migrant workers.
-- Unemployment insurance and vocational training subsidies were allocated to help enterprises protect existing jobs.
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