Financial moves helping to control virus

Measures being taken by financial authorities were outlined at a State Council press conference on Friday on the fight against the coronavirus epidemic. 

Five major bodies — the Ministry of Finance, the People's Bank of China, the State Administration of Taxation, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange — all emphasized containing the epidemic, launching all-round support measures and other policies.

The Ministry of Finance, for example, has pushed forward a series of measures on financial and policy security. 

As of 5pm on February 6, financial departments at all levels had allocated a total of 66.74 billion yuan (US$9.5 billion) for epidemic prevention and control, with an actual expenditure of 28.48 billion yuan, said Yu Weiping, deputy director of the Ministry of Finance. 

Of this total, the central government has allocated 17.09 billion yuan including 5.7 billion yuan as special subsidies for containing the coronavirus (including 1.8 billion yuan for hardest-hit Hubei Province), while 9.95 billion yuan is for basic public health services and grassroots epidemic prevention and control. Funds for scientific research and material reserve have also been fully arranged, Yu said.

The ministry also launched over 10 fiscal support measures, including making clear the treatment cost for patients, opening "green channels" and simplifying approval procedures for the procurement of medical supplies, and exempting imported materials donated for epidemic prevention and control from import duties, value-added tax and consumption tax.

The central government will cover 60 percent of the cost to patients who have been diagnosed with pneumonia. For suspected patients, local governments will formulate detailed financial assistance policies and the central government will also provide appropriate subsidies.

The central bank, meanwhile, has made efforts to keep market liquidity at a reasonably ample level in a bid to keep economic growth stable amid the outbreak.

It has provided relending funds of 300 billion yuan to national banks and local banks in the hardest-hit areas to grant credit support at favorable interest rates to key manufacturers of medical supplies and daily necessities, said Pan Gongsheng, deputy head of the People's Bank of China who is also the director of the State Administration of Foreign Exchange.

Also, the transmission mechanism for monetary policies will be further improved to reduce firms' funding costs, and more targeted measures will be implemented to help ease financing difficulties, especially for small and micro firms, Pan said.

Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, said at the briefing that although the ongoing epidemic is taking a toll on China's small and micro enterprises, its influence on the overall financial system will be partial and short-lived.

The commission has guided banks and insurance companies to aid small and micro firms hit by the coronavirus outbreak. Many major banks have lowered lending rates by 0.5 percentage points for small and micro enterprises in Hubei Province, while many other banks have also offered special loans or exemption of overdue interest to small firms, Zhou said.