Coronavirus: China’s State Council urges local authorities to speed up fiscal support for small firms
- The State Council has urged local authorities to swiftly allocate central government support to help businesses and households recover from the coronavirus pandemic
- China has budgeted about 2 trillion yuan (US$288.2 billion) to cushion the impact of the virus in the first eight months of the year, including 300 billion yuan in tax and fee cuts
China’s State Council has reiterated the urgent need to channel fiscal relief and bank credit to small businesses, as Beijing continues to nurse its fragile economy back to health after the coronavirus shock.
At the first regular meeting of China’s cabinet in three weeks on Monday, Premier Li Keqiang urged local governments to swiftly allocate central government support to businesses and households, according to an official statement posted online.
The policy was a break with routine in China, because money from Beijing often trickles down through a rigid fiscal hierarchy – the central government transfers funds to provincial authorities, then provincial authorities make their own budgets and allocate funds to municipal and county-level governments.
In the next step, we must guide cities and counties to speed up the process of granting the funds to help market entities and to support people’s livelihoods
The coronavirus shock, however, has pushed Beijing to adopt something closer to a disaster relief model to quickly distribute emergency aid.