China announces detailed stimulus policies to support virus-hit economy

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An employee works on the production line of RiotPWR mobile game controllers for U.S. company T2M, at a factory in Dongguan, Guangdong province, China December 7, 2021. REUTERS/David Kirton

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BEIJING, May 31 (Reuters) – China’s cabinet on Tuesday announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its pandemic-ravaged economy, adding that it will inspect how governments provincial authorities implement them.

The stimulus package, which was flagged by China’s State Council at a routine meeting last week, underscores Beijing’s shift to growth after COVID-19 control measures hit the country. economy and threatened Beijing’s 5.5% growth target for the year.

To boost investment and consumption, the government ordered localities not to expand restrictions on auto purchases and said those that already have restrictions in place should gradually increase their car ownership quotas.

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The Ministry of Finance also announced on Tuesday that it would halve the purchase tax for small cars. B9N2X102M

China will promote the healthy development of platform companies, which are expected to play a role in stabilizing jobs, the State Council said.

Platform companies are also encouraged to make breakthroughs in areas such as cloud computing, artificial intelligence and blockchain technologies, the State Council said, the latest sign that the China eases repression of the sector.

China will also increase private investment, speed up infrastructure construction and boost purchases of cars and home appliances to stabilize investment, according to the measures.

In terms of monetary and financial policies, China will enhance the efficiency of financing through capital markets, helping domestic companies register in Hong Kong and promoting overseas listings by qualified platform companies.

The State Council also pledged to further reduce real borrowing costs and strengthen financial support for infrastructure and major projects.

To bolster fiscal support for the economy, China will accelerate the issuance of special bonds by local governments and cash support for companies that hire college graduates.

Authorities will also provide tax credit refunds to more sectors and allow businesses in sectors hit hard by COVID-19 restrictions to defer social security payments, the State Council said.

Other measures include policies to ensure energy and food security and stabilize supply chains.

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Reporting by Stella Qiu, Samuel Shen and Ryan Woo; edited by Stephen Coates and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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