Opinion | Li Keqiang takes positive steps to China recovery as Hong Kong awaits draft national security law
- In an extraordinary response aimed at maintaining economic growth and full employment, the country’s premier eased pressure on business and acknowledged tensions with US on trade and the future of Hong Kong
China is facing an unprecedented challenge as it emerges from a shutdown for a pandemic that continues to depress demand for its products from the rest of the world. It calls for an extraordinary response if economic growth and full employment are to be maintained. Premier Li Keqiang came up with measures made for the times in his press conference after the annual parliamentary session on Thursday.
Beijing has pledged at least 4 trillion yuan (US$560 billion) worth of cuts in business costs this year. It is by far the biggest relief package of this nature, aimed at saving businesses and jobs and putting growth back on track amid the lingering virus outbreak.
The concessions include cuts in taxes and fees, lower bank interest rates, slashed utilities charges and, importantly in terms of lightening the costs burden for small and medium-sized enterprises, waivers of contributions to social welfare funds.
Li said this will come on top of 2 trillion yuan in additional fiscal stimulus and bond issuance. What sets it apart is that it is a departure from the infrastructure spending adopted after the global financial crisis that left a legacy of debt. Easing the burden of job-creating enterprises is preferable.
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Chinese Premier Li Keqiang on pandemic, China-US tensions and Hong Kong
The premier said about 70 per cent of the funds would support incomes and boost consumption. Smaller firms would also be targeted for support. The helping hand of the state in tough times extends to expanded coverage of subsistence allowances and unemployment benefits as well as higher pensions for the aged.
