China rolls out measures to support small firms, export sector, as top leaders vow to stick to zero-COVID policy
Published: May 06, 2022 01:07 AM
Workers work in a clothing manufacturing firm in Xinyu, Jiangxi Province on November 5, 2021. Photo: VCG
Workers work in a clothing manufacturing firm in Xinyu, Jiangxi Province on November 5, 2021. Photo: VCG

China mapped out a slew of measures to relieve difficulties for micro enterprises and individual businesses, as well as help export companies to cope with challenges, officials said at a State Council executive meeting on Thursday, while authorities also vowed to stick to the zero-COVID policy during another top-level meeting held on the same day.

At the State Council meeting held on Thursday chaired by Chinese Premier Li Keqiang, officials stressed that medium, small, micro enterprises and individual businesses are an important foundation for stabilizing the economy and the backbone for stabilizing employment. At a time when market entities are facing increasing difficulties, China should increasingly strengthen the support provided to them.

One measure repeatedly stressed at the meeting is that the government should speed up implementation of established policies such as tax reimbursements, ensuring smooth logistics and the return to work by companies, Xinhua News Agency reported.

In particular, the meeting stressed that the overpaid value-added tax credits should be returned to micro enterprises and individual businesses before June 30. Tax reimbursement for qualified medium enterprises should also be completed before this time, if possible.

Additionally, the officials stressed that China will increase financial support for smaller companies. For instance, large state-owned banks will increase 1.6 trillion yuan ($240 billion) of new inclusive small and micro loans this year to help the private sector. Banks will also be guided to extend loans and adjust loan repayment arrangements for smaller enterprises and individual businesses.

Furthermore, local governments are asked to arrange special relief funds for those companies and give subsidies to businesses under pressure on their loan interests, rent and other fees, the report said.

Apart from measures that target helping micro enterprises, the State Council meeting also listed a number of measures that aim at aiding trade companies in overcoming their difficulties.

The measures include the confirmation of a directory of key overseas trade companies and providing them with safeguards in areas like production, logistics and employment. The government also vowed to increase credit support for smaller trade companies, such as increasing the scale of short-term export credit insurance and stabilizing the yuan's exchange rate.

China moved to launch supportive measures for micro enterprises at a time when they are facing business uncertainties and extra pressure as a result of recent outbreaks of coronavirus in multiple cities.

At a meeting convened by the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, also held on Thursday, top leaders vowed to stick to the zero-COVID policy and battle any distortions, doubts or negation of China's pandemic-prevention policies.

The meeting also stressed that China's epidemic prevention work is at a critical time and local governments should stand firm and confident and consolidate China's existing COVID prevention results.

Economic data showed that China's economic sectors have already taken some hit from the ongoing pandemic. The Caixin services purchasing managers' index (PMI) fell to 36.2 in April, the second lowest since the survey stared in November 2005 and down from 42 in March.

The official Manufacturing PMI for China also fell to 47.4 in April 2022, from 49.5 in the prior month, according to data from the National Bureau of Statistics. This was the steepest pace since February 2020, as the COVID-triggered closed-loop management hampered production in certain regions.