Strengthen Covid-19 Control and Promote Economic and Social Development

Strengthen Covid-19 Control and Promote Economic and Social Development*

February 23, 2020

The economy and society, being dynamic in nature, cannot stop functioning for long. While ensuring effective Covid-19 control, we should resume the operation of enterprises and public institutions and restore the normal order of people’s work and life in places that are less affected by coronavirus. This is necessary in order to ensure adequate supplies for disease control, people’s livelihoods, and social stability. This is essential for us to meet the goals for this year’s economic and social development, finish the building of a moderately prosperous society in all respects, and meet the goals of the 13th Five-year Plan for Economic and Social Development. It is also important to our opening up initiative and to global economic stability.

Covid-19 will inevitably exert a negative impact on the economy and society. In such a challenging time, we must be more confident about our development in the long run and view it from a comprehensive and dialectical perspective. Generally speaking, our economy has maintained a positive trend despite the occurrence of Covid-19, which will not last long and will be brought under control. To achieve this year’s goals of socio-economic development, we must unleash our great potential and momentum by turning pressure into motivation and crisis into opportunity, by restoring the normal order to business and people’s lives, by taking solid measures to stabilize employment, finance, foreign trade, inbound investment, domestic investment, and market expectations, and by strengthening policy adjustment. 

First, adopting a region-specific, tiered and targeted approach to reopen the economy. 

The outbreak of Covid-19 made it hard for us to pool resources in a short time to control it. Now, when the situation has stabilized, we also face two challenges – strengthening Covid-19 control, and reopening the economy. A one-size-fits-all approach for different places will impede the restoration of economic and social order. However, relaxing controls indiscriminately will only put all our gains at risk. Based on these considerations, at the meeting of the Standing Committee of the Political Bureau on February 12, I proposed a region-specific, tiered and differentiated approach for coronavirus control in less affected areas. Now 1,396 counties and districts, 46 percent of the total number in the country, have no confirmed cases, and some counties and districts only have a few cases and basically no new cases. The authorities of these low-risk localities should quickly shift their focus to preventing inbound transmission and restoring their economic and social order. The authorities in medium-level risk areas should reopen the economy as progress in Covid-19 control allows, and those in high-risk areas should continue to focus on Covid-19 control. As the situation continues to improve, the authorities of provinces that meet the criteria should lower their response levels and make the appropriate adjustments.

Second, adjusting macroeconomic regulation. 

Macro policies, which are an effective way of making counter-cyclic adjustments, should be exercised with the right pace and intensity to offset the adverse impacts of Covid-19, protect the economy from an excessive slowdown, and prevent short-term impacts from turning into directional change. We should give the proactive fiscal policy another boost, and see that subsidized interest rates, largescale fee reductions, and tax deferrals deliver benefit to enterprises as soon as possible. We should continue to make phased and targeted tax and fee reductions, lend more support to some sectors in resuming operation, and help micro, small and medium-sized businesses survive these difficult times. The surplus funds of some central government departments should be pooled and used on Covid-19 control and key expenditures. Larger transfer payments should be made to localities whose government revenues are affected more by Covid-19, to ensure pay for local government employees, keep the government functioning, and meet people’s basic living needs. The issuance of special local government bonds should be expanded in scale, and the structure of local government budgetary investment should be improved. A prudent monetary policy should be pursued with greater flexibility as called for, support for the resumption of the operation of the real economy should be strengthened, current financial support policies should be fully used, and new policy measures should be enacted at the right time. To help businesses that are returning to work to repay debts, ensure capital turnover and expand financing, we should provide financial support, such as special credit lines for key Covid19 control areas, more severely affected industries, private businesses, and micro and small businesses. We should adjust the schedule for repayment of capital and interest by enterprises, facilitate loan extension and renewal, and reduce or appropriately exempt loan interest to micro and small businesses, so that they will not run out of operating funds.

Third, taking forceful and comprehensive measures to stabilize employment. 

We should give priority to employment, adjust policy measures as conditions change, ease corporate burdens, keep jobs stable, and expand employment. We should implement policies that support the special reduction and exemption of social insurance contributions, return unemployment insurance premiums to enterprises that have protected jobs despite difficulties, and provide subsidies to people who have just joined the workforce or started businesses. More targeted measures should be taken based on the conditions of localities and industries, to support those enterprises experiencing severe labor shortages, those struggling to protect jobs, and key groups of people having difficulty finding employment. Migrant workers in low-risk localities should be encouraged to return to work, and door-to-door pick-up services should be provided to transport them from their homes to their destinations. We should support flexible employment in various forms, and help individual businesses reopen as soon as possible. We should promote online unemployment registration and online application for unemployment insurance benefits, and make sure all eligible individuals get their benefits in full. We should help graduating college students find jobs by providing services related to graduation, recruitment, job application, and acceptance.

Fourth, eradicating extreme poverty as planned. 

Poverty eradication is scheduled for this year. We already face a tough challenge. Now we must work harder to offset the impact of Covid-19 and spare no effort in our fight against poverty. Direct channels should be established between source locations of migrant workforce and their employment destinations, and we should help migrant workers from poor areas resume work in an orderly fashion. We should help leading enterprises and workshops involved in poverty alleviation to resume operations, so as to create jobs locally. We should help farmers in poor areas find buyers for their agricultural and livestock products. We should move faster to establish a mechanism for preventing people from falling back into poverty, and take timely steps to help those who have fallen back into poverty due to Covid-19 or other reasons, to ensure their basic living needs are met.

Fifth, promoting the resumption of business operations. 

We should take a region-specific, tiered and targeted approach to Covid-19 control, which means removing transport bottlenecks to enable unimpeded movement of people and logistics and ease controls on freight. We should see that workers can return to their jobs, raw materials can reach factories, and finished products are delivered. The industrial chain is an interlocked system requiring the functioning of all links. If one link fails to function, both upstream and downstream businesses will be affected. Production and distribution links of the industrial chain across regions should be closely connected, so that they can resume operations at the same time. We should expand effective domestic demand, work faster on ongoing and new projects, ensure the supply of labor, land and capital, make good use of central government budgets for investment, special bond funds, and policy finance, and invest in sectors where it is mostly appropriate. Covid-19 poses both a challenge and an opportunity for industrial development. While some traditional industries are bracing for a negative impact, smart manufacturing, unmanned delivery, online consumption, health care, and other emerging industries have great potential for growth. We should take advantage of this opportunity to upgrade traditional industries and develop emerging industries.

Sixth, losing no time in carrying out spring farming.

Spring farming has started from south to north. We must solve pressing problems affecting production, circulation and provision of agricultural materials in time for sowing and plowing. Agricultural production must also begin in Hubei and other badly-affected provinces, adjusted to local conditions. Excessive restrictions on farmers working in open fields should be lifted to ensure timely planting. We must continue to strengthen control over African swine fever, HPAI and other major animal epidemics, and develop animal husbandry and aquaculture.

Seventh, meeting basic living needs. 

Covid-19 has directly affected people’s incomes; this plus growing prices may make life harder for some people. Provincial governors must ensure the supply of rice and other staple foods, and city mayors the supply of meat and vegetables. We must watch closely the impact of Covid-19 on supply and demand, ensure the supply of daily necessities, and keep prices from rising too fast. Vital services should continue during Covid-19 control, and services that people need most in daily life should be resumed in an orderly fashion. Relief for groups in need should be strengthened, and local authorities may give higher special price subsidies if they have the ability to do so. Special attention should be given to families of Covid-19 patients and families who have lost members to meet their basic living needs. Government officials should pay more visits to elderly people with no family, children from poor families, and people with serious diseases and disabilities who are in isolation at home. Acts in violation of social ethics must be prevented. Treatment and medicines should be provided for patients suffering from acute and severe conditions, patients with chronic diseases, and all other patients seeking medical care.

Eighth, ensuring normal foreign trade and foreign investment operations. 

We should ensure the smooth operation of industrial and supply chains in foreign trade, and maintain our share of the international market. We should make good use of export tax rebates, export credit insurance, and other trade policy tools that comply with due criteria, and expand export credits and relax the conditions for insurance underwriting and claims as appropriate. We should streamline customs clearance procedures, cut port, inspection and quarantine charges, and provide more convenient foreign exchange services. Local governments are encouraged to retain existing foreign investment and attract more investment, and launch key projects. We should further open up finance and other services, continue to improve the business environment, and attract and retain foreign investment, so as to boost international confidence in long-term investment and business operations in China.

* Part of the speech at a meeting on strengthening Covid-19 control and economic and social development.

(Not to be republished for any commercial or other purposes.)