A healthcare worker wears full protection gear in Shanghai on March 13, 2022. Photo: Xinhua

China has launched 23 new measures to support the businesses and people affected by the recent Covid-19 outbreaks, according to a joint statement issued by its central bank and foreign exchange regulator. 

The measures are aimed at supporting entities affected by the epidemic, ensuring unimpeded flows in the economy and promoting exports, the People’s Bank of China (PBoC) and State Administration of Foreign Exchange (SAFE) said in a statement on Monday. 

The central bank would guide financial institutions to expand lending and surrender profits reasonably to the real economy, the statement said. Housing credit policies should be varied in different cities and property developers’ reasonable financing needs should be met in a bid to stabilize the real estate market.

The statement was published after the National Bureau of Statistic (NBS) announced on Monday that China’s gross domestic product (GDP) grew 4.8% in the first quarter. The growth beat economists’ consensus but was lower than the full-year target of 5.5% for 2022.

On April 13, Chinese Premier Li Keqiang said in a State Council executive meeting that the government would launch supportive measures to counter the impact of Covid-19 and boost the recovery and growth of consumption. Li said the central bank would lower the reserve requirement ratio (RRR) at the right time for banks to offer more loans to small-and-medium-sized enterprises.

On April 15, the PBoC announced to cut RRR for all banks by 25 basis points, a move that would release about 530 billion yuan (US$83 billion) to stimulate the economy. 

On Monday, the PBoC and SAFE unveiled 23 new supporting measures, echoing a similar list of policies released in February 2020, at the height of the initial Covid outbreak.

The central bank said it would reward banks with funds equivalent to 1% of their newly increased loans for small and micro firms through mid-2023, and roll over an existing 400 billion yuan relending quota for inclusive finance. 

It said it would also expand the relending quota for small and agricultural businesses, and would guide banks to increase support for industries suffering from a temporary hit to business, including catering, hospitality, retail and tourism.

Resumption of production

Separately, Liu He, Chinese Vice Premier and a member of the Communist Party of China (CPC)  Central Committee’s politburo, told government officials in a teleconference on Monday that China would allocate 200 billion yuan and 100 billion yuan of relending funds to the technology and logistics sectors, respectively, to help stabilize supply and industrial chains.

Liu said a ”white list” of foreign trade firms and manufacturers in the automobile, integrated circuits, consumer electronics, machinery, agricultural, food and medical sectors would enjoy top priority to resume production.

Liu added that China would issue sufficient travel permits to truck drivers. He emphasized that local authorities should not restrict travel on the grounds of waiting for drivers’ nucleic acid test results.

Liu’s comments came after foreign companies complained that their production had been disrupted by the Shanghai lockdown. 

On April 11, the European Union Chamber of Commerce in China said it had sent a letter to China’s State Council and Vice-Premier Hu Chunhua urging the country to revise its “zero Covid” policy, which had disrupted European companies’ operations. Prior to this, the American Chamber of Commerce in Shanghai expressed concerns about the prolonged lockdown measures in the city.

On April 15, Shuichi Akamatsu, Japanese consul-general in Shanghai, wrote a letter to Shanghai’s Vice Mayor Zong Ming urging the authorities to address concerns over business disruptions amid the city’s prolonged lockdown measures. He acknowledged the city’s efforts to curb the virus but said the impact of virus control measures on business activities was clearly becoming more and more severe.

He said Japanese manufacturers might have to move their production lines out of Shanghai due to the disruption of the supply chain between China and Japan. He said currently there were 40,000 Japanese people and 11,000 Japanese companies in Shanghai.

Last Saturday, the Consulate General of the Republic of Korea in China wrote a letter to the Fudan University that it hoped the university would allow 2,000 Korean students to leave the campus and go home.

China’s Commerce Minister Wang Wentao met representatives of foreign companies in China to discuss the impact of Covid controls on their operations, Bloomberg reported on Monday. The participants of the meeting included chambers of commerce of the European, German, Japanese, South Korean and the United Kingdom, as well as AmCham China, AmCham Shanghai and the U.S.-China Business Council.

Wang was “attentive and amicable” during the two-hour meeting and promised to work with international businesses to resolve supply chain issues, Joerg Wuttke, president of the European Union Chamber of Commerce in China, said after the meeting.

Shanghai lockdown

Shanghai has been locked down for three weeks after thousands of Covid cases were reported per day in late March. On Monday, 3,084 Covid patients and 17,332 asymptomatic cases were identified, compared with 2,417 infections and 18,931 asymptomatic cases reported on Sunday.

Shanghai’s health commission stressed that only 550 new cases were identified outside quarantine facilities on Monday, down from 561 on Sunday and 722 on Saturday. The city has so far reported only 10 deaths in the current epidemic wave, with all the deceased aged above 60.

The largest commercial city in China had set a target to cut off all virus transmission chains in communities by Wednesday, meaning that all mild and asymptomatic patients had to be sent to quarantine centers within days, Reuters reported on Sunday, citing two people familiar with the matter.

Such a deadline has not been officially confirmed by the Shanghai government, however.

CITIC Securities, headquartered in Shenzhen, said in a research report on Sunday that it expected Shanghai would basically achieve the goal of Covid clearance in its communities around Wednesday.

It said the forecast was made as the Rt value, an indicator of how fast the Covid disease is spreading, in Shanghai had declined to 1.23 last Friday from 2.27 in late March while the number of beds in quarantine centers had increased to 270,000.

Meanwhile, Ma Xiaowei, minister of the National Health Commission of China, wrote in an article published by the Study Times, a publication of the Central Party School, on Monday that China should maintain its “dynamic zero infections” policy and try to achieve Covid clearance in its communities with the most determined measures at the lowest costs.

Ma said all medical and health staff, community workers and police had to contribute to the high-intensity epidemic control efforts and be further mobilized to improve their work. He said party organizations and members had to keep up their spirits and prevent the rebound of Covid infections as a way to welcome the opening of the 20th Party Congress in November.

On Tuesday, the Joint Prevention and Control Mechanism of the State Council said China would maintain its “dynamic zero infections” strategy and achieve the goal of Covid clearance in its communities as early as possible.

Wu Zunyou, Chief Epidemiologist, Chinese Center for Disease Control and Prevention, said Tuesday that the public should be mentally prepared for a long-term battle against the coronavirus as one day a variant with high lethality could emerge. Over the weekend, more Chinese cities, including Xi’an in Shaanxi, Suzhou in Jiangsu and Zhengzhou in Henan, announced their lockdown measures after dozens of cases were reported.

Read: Beijing signals monetary easing to boost economy

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