China will adopt a package of targeted, forceful and effective measures to support the economy, state television said, citing a cabinet statement, amid downward pressure on activity.
China will make every effort to return its economic operations to normal, the cabinet said.
“Currently, the downward pressure on the economy continues to increase and it is very difficult for many market entities”, the cabinet said after a routine meeting.
Chinese monetary authorities have pledged to step up support for the world’s second-largest economy, hit by COVID-19 outbreaks that have triggered severe restrictions, causing a major standstill.
Many private sector economists expect the economy to contract this quarter from a year ago, compared with 4.8% growth in the first quarter.
The government will provide tax credit rebates to more sectors and increase annual tax cuts by more than 140 billion yuan ($21.06 billion) to 2.64 trillion yuan, the cabinet said.
China will also cut some taxes on the purchase of passenger cars by 60 billion yuan, according to state media.
Authorities will postpone social security payments, including pension insurance premium payments, by small businesses, sole proprietorships and some hard-hit sectors until the end of this year, the cabinet said.
Deferred payments are expected to reach 320 billion yuan this year, it added.
Banks will defer payments on some loans, including auto and consumer loans, for small businesses and people facing difficulties, the cabinet said.
The national financing guarantee fund will boost its reinsurance business by more than 1 trillion yuan this year, it added.
China will launch a series of new projects in water conservancy, transportation and urban slum renovation, and start some new energy projects, the cabinet said.
The cabinet also pledged to increase domestic and international passenger flights in an orderly manner.
JPMorgan cuts forecast
US investment bank JPMorgan cut its full-year China growth forecast to 3.7% from 4.3%, saying a deeper-than-expected contraction is likely this quarter due to lockdowns to curb the spread. of COVID-19 in the country.
The cut puts JPMorgan’s estimate well below the 5.5% that Beijing has said it expects to achieve this year and below the 4% level that Goldman Sachs, another major US investment bank, predicted last week.
“On the bright side, the darkest period may be behind us”, analysts at JPMorgan said, pointing to the drop in the number of new COVID-19 cases in China last week.
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
