China to introduce greater support for smaller businesses and self-employed households, stabilize and upgrade foreign trade

BEIJING -- China will provide greater relief to 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.

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.

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

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

All outstanding VAT credits will be refunded by June 30 to micro and small enterprises (MSEs) and self-employed households. 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 of inclusive loans for MSEs. The 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.

Business scope of state financing guaranty funds and government financing guaranty institutions will be expanded to cover more MSMEs and self-employed households. Specific measures to support the healthy development of platform economy should be introduced as quickly as possible.

Local governments should earmark special relief funds for MSMEs and self-employed households, to subsidize the rentals, guarantee fees and loan interests borne by those in difficulty.

Local authorities will be encouraged to adopt temporary preferential policies on electricity price for MSEs and self-employed households; the supply of water, electricity and gas will not be cut off due to fee arrears, and such payments may be completed within six months. The average broadband and dedicated internet service rates for MSMEs will be discounted by another 10 percent.

"Support 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. Those with difficulties in paying the arrears should make specific repayment plans before the end of June.

Clearing overdue payments will be made a priority in the audit-based oversight and the State Council's accountability inspections this year, and arrears in disguised forms will be investigated and brought to account. Measures to shorten the payment period of commercial acceptance bills will be introduced at a faster pace.

Responsibilities especially those of local governments will be fully enforced, with a focus on addressing the impediments to policy implementation.

"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 import and export is much lower than previous years and is under immense pressure. We must find ways to retain orders and stabilize foreign trade," Li said.

To help foreign trade enterprises meet the difficulties and challenges, the meeting also decided to ensure stability in the production and circulation in foreign trade, work out lists of key foreign trade enterprises and support their production, logistics and employment.

Transportation of goods to and from seaports and airports will be unclogged at a faster pace, to increase the efficiency of logistics and customs clearance. Air cargo capacity will be better harnessed to ensure transportation of important components and products. Irregularities of freight rates in foreign trade will be duly investigated and handled.

Policies will be swiftly rolled out to facilitate cross-border e-commerce returns and exchanges. Eligible cross-border e-commerce firms will be supported in applying for the status of high- and new-technology enterprises.

Steady growth of processing trade will be supported. Labor-intensive processing trade in central, western and northeastern regions will be included in the national catalogue of encouraged industries. The inclusion of large medical equipment and robots in the scope of bonded repair services will be explored. Bonded re-manufacturing of automobile engines will be piloted.

"Dedicated efforts should be made to retain orders and stabilize 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 in foreign trade will be increased. Banks will be supported for not blindly withdrawing, cutting off or withholding loans to those firms experiencing temporary hardship. Eligible firms in urgent need of funding will be given support on a priority basis.

The scale of short-term export credit insurance services will be expanded and the time needed for claim-settlement shortened. Insurance policy-based financing will be increased.

The RMB exchange rate will be kept generally stable at an adaptive, balanced level. Services by such platforms as the China Import and Export Fair (Canton Fair) will be improved, to reinforce interactions with cross-border e-commerce businesses.

Localities should make good use of the special funds for international economic and trade development, and support MSMEs in participating in exhibitions overseas. More innovation demonstration zones for import trade will be developed.