China pledges largest-ever economic rescue package to save jobs and livelihoods amid coronavirus
- Premier Li Keqiang confirmed the 4 trillion yuan (US$559 billion) worth of cost cuts for the country’s struggling factories and merchants on Thursday
- The combined cuts in business costs will be carried out on top of 2 trillion yuan in additional fiscal spending and government bond issuances
China has pledged a package of 4 trillion yuan (US$559 billion) worth of cost cuts for the country’s struggling factories and merchants in 2020, the largest economic rescue plan in its history, in an enhanced effort to save jobs that were put at risk by the coronavirus outbreak, Premier Li Keqiang confirmed on Thursday.
The combined cuts in business costs, which include tax exemptions, lower bank interest rates and waived contributions to social welfare funds as well as reduced prices for utilities such as electricity, will be carried out on top of 2 trillion yuan in additional fiscal spending and government bond issuances.
“We have been saying that we won’t flood the market [with excessive liquidity]. It is still the policy,” Li said. “But extraordinary times call for extraordinary efforts. We are now providing water so that the fish can survive – fish will die without enough water, but there will be bubbles if we provide too much water.”
If our targets of protecting jobs, livelihoods and market entities can be achieved, we’ll be able to achieve a positive economic growth rate in 2020
In addition, Li said Beijing has many fiscal, financial and social security policies in reserve, and it will roll out additional policy support “without hesitation”.