Nation to support small firms, stabilize market

A worker makes products at a numerical control equipment factory in Hai'an, Jiangsu province, Jan 5, 2022. [Photo/IC]

Premier Li says China faces 'quite big pressure on the employment front'

China will provide greater support for micro, small and medium-sized enterprises (MSMEs) and self-employed households, to promote employment stability by keeping the operations of market entities stable, according to the decision made at the State Council's Executive Meeting chaired by Premier Li Keqiang on Thursday.

"There is now quite big pressure on the employment front. The many MSMEs and self-employed households across sectors are a key foundation of steady economic and job growth, but related market entities currently encounter much difficulty. We must step up support for them. This will also help keep industrial and supply chains stable," Li said.

Policy measures, such as on tax refunds and reductions and fee cuts, deferred payment of social insurance premiums, open and smooth logistics services and the early resumption of the full-capacity production of enterprises, should be effectively implemented.

All outstanding VAT credits to micro and small enterprises (MSEs) and self-employed households will be refunded by June 30. The time limit will be made applicable to eligible medium-sized firms to complete their tax refunds ahead of schedule.

This year, large State-owned banks will add over 1.6 trillion yuan ($241.7 billion) of inclusive loans for MSEs. Banks should renew loans, extend and adjust repayment arrangements, and waive default interest for MSMEs and self-employed households as appropriate, and their credit records will not be affected.

Local governments should earmark special relief funds for MSMEs and self-employed households, to subsidize the rental costs, fees and loan interest of those in difficulty.

"Supportive policies that have been developed should be delivered at a faster pace, to help enterprises stay alive. Meanwhile, policy support, especially financial assistance, will be stepped up. Banks will be guided toward more proactive services," Li said.

A comprehensive review will be launched before the end of May on the outstanding payments that government bodies, public institutions and large enterprises owe to MSMEs. All undisputed overdue bills will be promptly cleared.

The meeting also decided on policy steps to stabilize and upgrade foreign trade, in an effort to keep the economy and industrial and supply chains stable.

"Last year, foreign trade played a very important role in supporting economic growth and boosting employment. This year, due to domestic and external factors, the growth of imports and exports is much lower than in previous years and is under immense pressure. We must find ways to retain orders and stabilize foreign trade," Li said.

The meeting decided to ensure the stability of foreign trade, draw up lists of key foreign trade enterprises and support their production, logistics and employment. Irregularities in freight rates related to foreign trade will be duly investigated and handled.

Labor-intensive processing trade in central, western and northeastern regions will be included in the national catalog of encouraged industries.

"Dedicated efforts should be made to retain orders and stabilize the imports and exports of key industries and labor-intensive processing industries. This is crucial to stabilizing employment," Li said.

It was emphasized at the meeting that credit loans issued to MSMEs engaged in foreign trade will be increased. Banks will be encouraged not to blindly withdraw, cut off or withhold loans to firms experiencing temporary hardship. Support will be prioritized for eligible firms in urgent need of funding.