Tue, Feb 25, 2020 page10

• Virus Outbreak: China vows to aid companies; sticks to target

  • AP, BEIJING
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  Chinese regulators yesterday promised tax cuts and other aid to help companies recover from the COVID-19 outbreak and expressed confidence that the Chinese Communist Party’s (CCP) growth targets can be achieved, despite anti-disease controls that have shut down much of the economy.

  At a news conference, finance and planning officials said they are looking at how to channel aid to businesses after Chinese President Xi Jinping (習近平) promised over the past week to ensure farming and other industries recover quickly.

  China has allocated 99.5 billion yuan (US$14.16 billion) in funds for curbing the outbreak that has spread across the nation, Chinese Assistant Minister of Finance Ou Wenhan (歐文漢) said.

  

  Workers wearing face masks work next to a furnace at a steel plant in Hangzhou, China, yesterday.

  Photo: Reuters

  The government is looking at “targeted tax reduction,” interest rate cuts, and payments to poor and virus-hit areas, Ou said.

  “We will do a good job of implementing large-scale interest rate reduction and tax deferral and ensure effective implementation as soon as possible,” Ou said.

  Business activity plunged after the government extended the Lunar New Year holiday last month to keep factories and offices closed and told the public not to travel.

  Officials are shifting toward reviving business, but also have orders to prevent infection from spreading as millions of people return to work.

  Xi said at a meeting on Sunday that regions deemed to be at low risk of the disease should ease curbs controls and revive business activity while high-risk regions should focus on control.

  He added that officials should make sure planting of spring crops is not disrupted.

  Asked whether Beijing planned to reduce its economic growth targets for the year, the National Development and Reform Commission expressed confidence the virus’ impact would be brief.

  The CCP has yet to announce this year’s economic targets after last year’s growth fell to a multi-decade low of 6.1 percent.

  Forecasters expect it to be about 6 percent, but say if the disease is not controlled quickly, growth could decline to as low as 5 percent, raising the risk of politically dangerous job losses.

  “The epidemic’s impact on the economy and society is short-term and generally controllable, and will not change China’s long-term positive economic fundamentals,” commission official Cong Liang (從亮) said.

  “Economic and social development goals for 2020 can be achieved,” Cong said.

  Nearly 1,000 companies have received low-interest loans from a 300 billion yuan (US$43 billion) recovery fund offered by the central bank, People’s Bank of China official Chen Yulu (陳雨露) said.

  Cong said that industrial output is rebounding, though he gave no indication when the government expects it to return to normal.

  Production by companies in trade-oriented coastal areas has risen above 70 percent of normal, Cong said, adding that food processing, coal mining and other industries are back to at least 70 percent, but he gave no figures for the level of production at their lowest point during the outbreak.

  Additional reporting by Reuters
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