2022 – China announces detailed stimulus measures to support the economy affected by the virus

© Reuters. FILE PHOTO: A worker works on the production line of US company T2M’s RiotPWR handheld game consoles at a factory in Dongguan, Guangdong Province, China, December 7, 2021. REUTERS/David Kirton

BEIJING (Reuters) – China’s Cabinet on Tuesday announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive its epidemic-hit economy, adding that it will study how provincial governments implement those measures.

The stimulus package, announced by China’s State Council at a routine meeting last week, underscores Beijing’s shift toward growth after measures to control the coronavirus have hurt the economy and threatened Beijing’s 5.5% growth target for this year.

In an effort to revive investment and consumption, the government has ordered municipalities not to expand restrictions on car purchases and said those who already have restrictions should gradually increase their car ownership quotas.

The Ministry of Finance also announced, on Tuesday, the halving of the tax on the purchase of small cars. [B9N2X102M]

The State Council said China will promote the healthy development of platform companies, which is expected to play a role in stabilizing jobs.

The State Council said that platform companies will also be encouraged to make breakthroughs in areas such as cloud computing, artificial intelligence and blockchain technologies, in the latest sign that China is easing its crackdown on the sector.

According to the measures, China will also expand private investment, speed up infrastructure construction, and stimulate the purchase of cars and household appliances to stabilize investment.

In terms of monetary and fiscal policy, China will increase the efficiency of financing through capital markets by supporting domestic companies to list in Hong Kong and encouraging overseas listing through qualified platform companies.

The State Council also pledged to further reduce the real cost of borrowing and increase financial support for infrastructure and major projects.

To improve financial support for the economy, China will speed up the issuance of special local government bonds and monetary support for companies that hire college graduates.

The State Council said the authorities will also grant tax credit rebates to more sectors and allow companies in industries hard hit by COVID-19 restrictions to defer Social Security payments.

Other measures include measures to ensure energy and food security and to stabilize supply chains.