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China's financial toolkit to combat coronavirus

Updated: February 7, 2020 20:47    Xinhua

BEIJING — Amid a national campaign against the novel coronavirus (2019-nCoV), China has rolled out a raft of fiscal measures to counter the epidemic.

The following are the latest policies and measures as part of the country's financial toolkit for the anti-virus battle:

— As of 5 pm, Feb 6, governments at all levels had allocated 66.74 billion yuan (about $9.55 billion) in containing the epidemic, including 17.09 billion yuan from the central government.

— Donated supplies for the epidemic prevention and control efforts have been exempted from import duties, import value-added tax and consumption tax.

— Import duty exemption also applies to the purchases of supplies organized by domestic medical and public health departments to be directly used in the epidemic control efforts.

— Enterprises producing key supplies are able to get their taxes on facilities payments for expanding production capacity deducted in full on a one-time basis, with provisional policies beginning on Jan 1.

— Revenues from transporting key emergency supplies and providing public transportation, life services and express mail services can enjoy value-added tax exemption.

— Registration fees for drugs and medical equipment for novel coronavirus containment are waived, and support for research and development of the drugs and vaccines will be strengthened.

— For firms in the transportation, catering, accommodation and tourism sectors, their losses logged in 2020 can be carried over to an extended maximum period of eight years.

— People working in the transportation, life service, and daily necessities delivery sectors will be exempted from the value-added tax, and airlines' payments to the government's civil aviation development fund are also waived.

— Enterprises are encouraged to increase the production of key medical supplies while ensuring quality, while overproduced medical supplies will be purchased by governments as reserves.

— Commercial banks will be supported in providing loans to key enterprises in the production, shipment, and sales of essential supplies at a concessional rate. A 50 percent interest discount will be financed by public funds to keep the rate at less than 1.6 percent.

— The People's Bank of China, or the central bank, released a total of 1.7 trillion yuan with open market operations on Feb 3 and Feb 4.

— The central bank has provided relending funds of 300 billion yuan to national banks and local banks in the worst-hit regions, which will then grant credit support at favorable interest rates to key manufacturers of medical supplies and daily necessities.

— Commercial banks are required to establish a "green channel" to make forex and cross-border renminbi businesses more effective, with stepped-up efforts to facilitate the imports of anti-virus supplies and support enterprises in cross-border financing for epidemic control.

— The central bank will also use various means such as stronger financing support, lower lending rates, more credit loans and medium- and long-term loans to help the most affected enterprises pull through.

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