China unveils detailed stimulus measures to support virus-hit economy

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A worker works on the production line of RiotPWR mobile gaming controllers for U.S. company T2M at a factory in Dongguan, Guangdong province, China, December 7, 2021. REUTERS/David Kirton

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BEIJING, May 31 (Reuters) – China’s cabinet on Tuesday unveiled a package of 33 measures encompassing fiscal, financial, investment and industrial policies to revive a pandemic-stricken economy, saying it will examine how provincial governments do implement them.

The stimulus package, announced at a routine meeting by China’s State Council last week, underscores Beijing’s shift toward growth after draconian COVID-19 control measures hit the economy and threatened Beijing’s 5.5% growth target for the year.

To revive investment and consumption, according to the measures, China will encourage healthy development of platform companies, which are expected to play a role in stabilizing jobs.

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Platform companies will also be encouraged to make breakthroughs in areas like cloud computing, artificial intelligence and blockchain technologies, the State Council said, the latest sign China is relaxing crackdown on the sector.

According to the measures, China will also expand private investment, accelerate infrastructure construction and stimulate purchases of cars and home appliances to stabilize investment.

In terms of monetary and fiscal policy, China will increase funding efficiency through capital markets by supporting domestic companies to list in Hong Kong and encouraging offshore listings through qualified platform companies.

The State Council also pledged to further reduce the real cost of borrowing and increase financial support for infrastructure and major projects.

To improve fiscal support for the economy, China will accelerate local government special bond issuance and cash support for companies hiring college graduates.

Authorities will also grant tax credit rebates to more sectors and allow companies in industries hit hard by COVID-19 restrictions to defer social security payments, the State Council said.

Other measures include measures to ensure energy and food security and to stabilize supply chains.

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Reporting by Stella Qiu and Ryan Woo; Edited by Muralikumar Anantharaman and Stephen Coates

Our standards: The Thomson Reuters Trust Policy.

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