At the State Council executive meeting on March 10, Premier Li Keqiang called for intensified market-oriented reform and opening-up to achieve economic recovery and growth in the next step, as well as to keep the economy operating in a reasonable range.
Further steps will be taken to smooth the industrial and capital chain, promote coordination of work and production resumption, give better play to the role of refinancing and rediscounting to ensure the supply of materials for epidemic prevention and control, and support firms in difficulty, according to those at the meeting.
Promote resumption of work and production
Having learned that many enterprises have not recovered normal production after returning to work, Premier Li asked local authorities and related departments to promote orderly work and production resumption for the entire industrial chain, while putting precise epidemic control in place.
"We are on a path of integrated development among large, medium and small enterprises,” Premier Li said. The reason for insufficient production is the mismatch of the work resumption ratios between large firms and medium and small enterprises, he added.
The government should improve guidance on epidemic prevention and control for work and production resumption, and take coordinated services among departments to clear clogging points in industrial and supply chains, and encourage leading enterprises to drive supporting businesses to coordinated resumption of work and production, the Premier said.
The Premier also stressed enhancing international efforts, such as adding more international cargo flights to maintain unblocked international supply chains.
Support core enterprises in industrial chains to power SMEs
When inspecting work and production resumption recently at an airmail dispatch center of leading logistics service provider SF Express in North China, Premier Li learned large enterprises also are suffering from the financial predicament hindering small- and medium-sized enterprises from restarting operations amid the epidemic.
Premier Li urged government departments to study the construction of a financing platform for core businesses in industrial chains to aid relevant SMEs in distress.
Powerful industrial chains and capital chains are equally important to facilitate the resumption of work and production across the board, the Premier said at the meeting.
As SMEs are experiencing the money crunch, he said, the government should step up measures to lower their lending costs through greater credit support to the core businesses in industrial chains.
The meeting made decisions to guide financial institutions to actively engage with those core businesses, granting them more working capital loans and lines of credit as appropriate.
The move aims to relieve financial pressure on SMEs throughout the entire industrial chain as they gain advances from core enterprises.
Those at the meeting also suggested pledging the likes of accounts receivable and inventories for borrowing, as well as allowing eligible enterprises a lower share of deposits needed for banks’ draft acceptance.
With the refinancing and rediscounting policies unveiled earlier by financial institutions showing encouraging results, Premier Li called for better execution with expedited loan issuance to ensure supplies for epidemic control and spring farming, as well as support production in international supply chains, labor-intensive industries, and micro-, small- and medium-sized enterprises.
Credit supervision should be enhanced while delegating loan approval to raise efficiency in shoring up the real economy, the Premier said.
He also urged targeted cuts to required reserve ratios to promote commercial banks to lower financing costs for small and individual businesses.
Make all-out efforts to stabilize employment
"The impact of the epidemic on the Chinese economy should not be overlooked, but, in any case, we should make all-out efforts to stabilize employment," Premier Li said.
"All departments concerned should take employment stability as their top priority when considering their tasks for this year," he added.
As long as employment remains stable this year, it is less important to have slower or higher economic growth, the Premier said.
Therefore, efforts must be made to provide convenience for starting businesses of all kinds and finding jobs through administrative reforms, Internet Plus strategies and the mass entrepreneurship and innovation initiative.
Premier Li called for the government to strengthen reform and opening-up, optimize the business environment, and stimulate market vitality.
"The successful experience in reform and opening-up over the past four decades tells us that the more difficulties we face, the greater reform and opening-up should be taken,” he said.
