Development is the basis and key for resolving all problems, says premier

China will adopt a package of measures to stabilize economic performance in an effort to get the economy back to a normal track and keep major economic indicators within an appropriate range, the State Council decided at a recent executive meeting chaired by Premier Li Keqiang.

Noting the increasing downward pressure on the economy and the serious difficulties facing many market entities, the meeting stressed the need to stay confident, respond resolutely, fully apply the new development philosophy and coordinate COVID response with economic and social development with high efficiency.

"Power generation, freight volume and bank loans have all declined since April. Without a certain level of GDP growth, stable employment cannot be realized. One good thing is that we refrained from excessive money supply and mass stimulus in the past few years, and we still have policy tools in reserve," Li said.

The meeting decided to implement 33 measures in six aspects, which mainly include fiscal and related policies, to keep the operation of market entities and employment stable. The policy of refunding outstanding and newly added value added tax credits will be extended to more industries, which is expected to increase tax refunds by more than 140 billion yuan ($21 billion) and bring the total amount of tax relief this year to 2.64 trillion yuan.

The policy of deferred premium payments of old-age, unemployment and workplace safety insurance programs by micro, small and medium-sized enterprises, self-employed households and companies in the catering, retail, tourism, civil aviation, and highway, waterway and railway transportation sectors will be prolonged until the end of this year, and extended to other industries facing serious difficulties. As a result, the deferred payments this year will reach 320 billion yuan.

Insurance extended

The subsidy for retaining employees under unemployment insurance will be extended to all hard-hit enterprises participating in the plan. The re-guarantee business of the national financing guarantee fund will be increased by more than 1 trillion yuan this year.

Energy security will be ensured. The policy for approving the increased production capacity of coal mines will be recalibrated, and procedures for designating coal mines especially important for energy supply will be accelerated. A number of new hydropower and coal-fired power projects will start this year.

The meeting decided to implement a string of financial policies. The scale of the support facility for inclusive loans to micro and small businesses will be doubled this year. Banks will be supported in deferring, within this year, principal and interest repayments on loans made to micro, small and medium-sized enterprises and self-employed households, as well as truck loans, home loans and consumer loans borne by individuals facing temporary difficulties.

"For China, development is the basis and key for resolving all problems. We must efficiently coordinate COVID response with economic and social development and better use the experience we gained in the past two years," Li said

"Policy support must be beefed up, and policy measures should be swiftly rolled out wherever needed, to keep major economic indicators within an appropriate range and ensure stable overall economic performance."

The meeting adopted measures to stabilize industrial and supply chains. The policies to enable early reopening of enterprises and their full-capacity production will be fine-tuned.

People-oriented policies

The meeting stressed the imperative need to ensure people's basic livelihoods. Support must be provided for people eligible for unemployment benefits and subsistence allowances and people facing difficulties. The mechanism of raising social benefits to keep pace with price increase will be promptly activated should the situation require.

Restrictions on the passage of trucks from low-COVID-risk areas will be lifted and all undue limits and arbitrary charges will be scrapped. Domestic and international passenger flights will be increased in a well-paced manner.

Consumer spending and effective investment will be boosted, and car purchase restrictions will be relaxed. There will be a phased reduction of purchase tax totaling 60 billion yuan on some passenger vehicles. City-specific policies will be adopted to meet people's basic housing needs and their wish to improve housing conditions.

A number of infrastructure projects will be launched, including water conservancy facilities, especially large-scale irrigation facilities, transportation facilities, the renovation of old residential communities, and multipurpose utility tunnels. Banks will be encouraged to provide long-term loans on a sizable scale.