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China Rolls Out New Stimulus Measures, increase the number of international flights
Published on: 2022-05-26
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China rolled out a broad package of measures to support businesses and stimulate demand as it seeks to offset the damage from Covid lockdowns on the world’s second-largest economy.

The 33-point package include 140 billion yuan ($21 billion) in additional tax rebates and 300 billion yuan in railway construction bonds, Xinhua News Agency reported, citing a decision from a meeting of China’s State Council, the cabinet, chaired by Premier Li Keqiang.

The additional tax cuts represent about 0.1% of China’s gross domestic product last year, and push the government’s total planned reduction in taxes this year to 2.64 trillion yuan -- slightly more than the relief Beijing offered in 2020 when China was first hit by the pandemic.

Economists were cautious about whether the measures would provide a material boost to growth as China’s strict Covid Zero policy causes major disruption to business activity. Many economists expect the government won’t meet its annual GDP growth target of about 5.5% this year, with UBS Group AG the latest to downgrade its projection to just 3%.

The State Council said the policies are intended to “stabilize” the economy and get it back onto its normal track. Authorities will improve policies to help supply chains function, ensure domestic cargo transport runs smoothly and increase the number of domestic and international flights, it said.

Beijing will extend an existing delay on companies’ social-insurance contributions to the end of the year and expand the measure to more sectors, according to the report, with those deferred payments expected to amount to 320 billion yuan. A quota for loans aimed at small and medium-sized enterprises would be doubled, it said.




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