China’s State Council on Tuesday issued a circular detailing a package of measures aimed at stabilizing the economy amid high risk caused by the COVID-19 pandemic and the Russian-Ukrainian conflict.
The package was first announced at a State Council executive meeting last week, now the State Council has urged local governments to implement the detailed policy measures.
The package covers six areas, including taxation, consumption and supply chain, with a total of 33 measures.
In terms of fiscal policy, China will accelerate the issuance of local government special bonds and expand the scope of support. Besides the nine sectors on the support list, new infrastructure and new energy projects should be given priority support, the State Council said.
China will speed up the issuance and utilization of the 3.45 trillion yuan special bond quota issued this year. He aims to complete the show by the end of June and work to complete the use of the fund by the end of August.
China will improve the efficiency of financing via capital markets and facilitate the standardization of IPOs and refinancing. It will help mainland companies register in Hong Kong and promote the overseas listing of qualified platform companies.
To boost investment and consumption, China will support the healthy development of the platform economy and use the development of platform enterprises to relieve small, medium and micro enterprises. The Council of State has also recognized the sector’s role in stabilizing employment.
Boost car sales
No new vehicle purchase restrictions will be issued, and regions that have implemented purchase restrictions should gradually ease such measures, according to the circular.
Automobile sales account for 10 percent of China’s total retail sales, which is a key sector to expand domestic demand and boost consumption, Sheng Qiuping, vice minister of commerce, told a press conference. after the publication of the circular.
Noting that passenger car sales in China fell by more than a third in April, Sheng said the Ministry of Commerce will work with relevant departments to issue detailed implementation measures to boost auto sales. and will focus on increasing new car sales and revitalizing the market. used cars.
The department will also work to promote sales of new energy vehicles in the countryside and actively support the construction of charging facilities, Sheng added.
The package also includes postponing social security payments for companies hit hard by the pandemic, accelerating the launch of some energy projects and stabilizing supply chains.
With repeated emphasis on implementing economic stabilization policies and easing COVID-19 control measures, the recovery trend is set to last, said Wang Jingwen, director of macro research. at China Minsheng Bank.
The benchmark Shanghai Composite Index jumped 1.19%, the Shenzhen Component Index climbed 1.92% and the ChiNext Index gained 2.33% as of Tuesday’s market close.
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