Shops on Shenzhen Bay Avenue. Photo: Wikimedia Commons/Lao Men Faei

The Chinese government has launched a series of financial measures that will allow small-and-medium-sized enterprises (SMEs) and micro firms to enjoy extra financial sources of more than 3 trillion yuan (US$428.57 billion) this year.

The standing committee of China’s State Council held a meeting, chaired by Premier Li Keqiang, on Tuesday and decided to increase the refinancing and rediscount quotas for small-and-medium-sized banks by 1 trillion yuan, allow financial institutions to issue 300 billion yuan of bonds for SME loans, allow corporates to issue credit bonds to raise an additional 1 trillion yuan and encourage SMEs to raise 800 billion yuan by securitising their receivables this year.

The State Council said it will allow local government to issue more bonds for special projects and increase the pace of the construction of existing infrastructure projects. It said it is important to boost local investment with counter-cyclical macro-policies to offset the negative impact of the Covid-19 outbreak on economic and social development.

The central government will extend the periods of the subsidies and the exemption of vehicle purchase tax for new energy car buyers by two years, encourage the elimination of diesel trucks at or below China III emission standards in Beijing, Tianjin and Hebei province and impose a 0.5% value-added-tax waiver between May 1 this year and the end of 2023.

Opinion

The high growth of China’s automobile industry has almost paused since the arrival of Covid-19 in the first quarter.

The negative impact of the epidemic on the automobile industry was not limited to the first half of this year, but would sustain in the second half too, said Dong Yang, former executive vice-chairman and secretary-general of the China Association of Automobile Industry.

As most automobile makers have resumed production and are working overtime to maintain a stable supply to the markets, their capacities should not be a factor to limit the sector’s sales growth, said Liang Chao, an analyst at Guoxin Securities. However, it may take some time for market demand to pick up after the epidemic, Liang said.

Power grid

The State Grid Corporation of China, a state-owned enterprise, initially planned to invest 450 billion yuan in its power grid this year, Zhang Zhengling, a spokesperson of State Grid, said in an interview with the China Electronics News Agency.

The new investment will drive another 900 billion yuan in social investment. It includes an investment of 181.1 billion yuan in ultra-high voltage construction projects, which will result in another 360 billion yuan in social investment.

Company news

Huawei Technologies, a Shenzhen-based technology firm, said its net profit rose 5.6% to 62.7 billion yuan for the year ended December 31, 2019, from 59.3 billion yuan in 2018. Global sales revenue in 2019 increased by 19.1% to 858.8 billion yuan. Research and development expenses amounted to 131.7 billion yuan, 15.3% of its global sales revenue.

Eric Xu, the Rotating Chairman of Huawei, said the company’s telecommunication solutions were used in more than 50 countries and places and provided mobile internet services to more than 40 million people in rural places globally.

China Cinda Asset Management Co Ltd saw 8.4% growth in its net profit to 13.05 billion yuan last year from 2018. Total assets under the company’s management expanded 1.2% to 1.51 trillion yuan. Average return on assets increased 0.18 percentage points to 1%.

The story was written by Yang Ying and Xu Jiangshan and first published at ATimesCN.com.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.