Since March this year, the epidemic has rebounded in many provinces and cities, casting a shadow on China’s economic recovery. Recently, the meeting of the Political Bureau of the CPC Central Committee clearly released the policy signal of “stabilizing growth, employment and prices” to inject a shot in the arm into the market.
On May 5, the executive meeting of the State Council further refined relevant policies and deployed further relief measures for small, medium-sized and micro enterprises and individual industrial and commercial households, so as to ensure stable employment of market players; Determine measures to promote the stability and quality improvement of foreign trade, and help stabilize the economy and stabilize the industrial chain and supply chain.
increase financial support
Since the beginning of this year, the Pearl River Delta, Yangtze River Delta and other important economic zones have successively broken out, and all localities have taken relatively strict sealing and control measures. Affected by this, the impact of supply chain has intensified, which has brought new impact to the economy.
In April, the manufacturing PMI further contracted by 2.1 percentage points to 47.4, and several sub indicators continued to weaken significantly. In April, the rebound of the national epidemic intensified, resulting in the further expansion of the scale of shutdown and closure management, the obvious decline of enterprise production, the continued decline of market demand, and the production index and new order index decreased by 5.1 and 6.2 percentage points respectively compared with the previous month.
The meeting of the Political Bureau of the CPC Central Committee proposed to stabilize the market players and implement a package of relief and assistance policies for industries, small, medium-sized and micro enterprises and individual industrial and commercial households seriously affected by the epidemic; We should stick to a game of chess throughout the country, ensure smooth transportation and logistics, and ensure the normal operation of key industrial chains, supply chains, anti epidemic and supply guarantee enterprises and key infrastructure.
The national Standing Committee further proposed to increase policy support, especially financial support. And set specific goals: this year, large state-owned banks will increase inclusive small and micro loans by 1.6 trillion yuan, and guide banks to strengthen active services. For small, medium-sized and micro enterprises and individual industrial and commercial households, the loan renewal, extension and adjustment of repayment arrangements shall be reasonable, and the penalty interest shall be exempted. Expand the coverage of government financing guarantees. Introduce specific measures to support the standardized and healthy development of the platform economy as soon as possible. All localities should arrange special funds for the relief of small, medium-sized and micro enterprises and individual industrial and commercial households, and give subsidies such as rent, guarantee fee and loan interest to those with operating difficulties. Local governments are encouraged to implement phased preferential electricity prices and “non-stop supply of arrears” of water and electricity for small and micro enterprises and individual industrial and commercial households. Reduce broadband and dedicated line charges for small, medium-sized and micro enterprises by another 10%.
Wen bin, chief researcher of China China Minsheng Banking Corp.Ltd(600016) said that to prevent the epidemic, stabilize the economy and ensure safe development, we must implement it well. The urgent task is to control the epidemic as soon as possible and minimize the impact of the epidemic on economic and social development. On the one hand, we should strengthen relief efforts, support industries and enterprises affected by the epidemic to speed up the resumption of work and production, continue to ensure the supply and price of energy, ensure smooth transportation and logistics, improve the order receiving capacity of enterprises, and ensure the safety and stability of the industrial chain. On the other hand, we should make every effort to expand domestic demand, give further play to the role of infrastructure investment in underpinning the economy, orderly promote the recovery of consumption and keep the economy running within a reasonable range.
Since this period, many departments have continued to release positive signals such as “full support for freight logistics”.
In terms of financial measures, the central bank issued 23 policy measures to increase financial support for the smooth logistics and shipping cycle, and pointed out that financial institutions should actively follow up and effectively meet the financing needs of transportation enterprises. Open up a “green channel” for transportation and logistics enterprises with heavy tasks in epidemic prevention and control and emergency transportation, optimize the credit approval process, and provide flexible and convenient financial services; The cbcirc requires the banking and insurance industry to go all out to help the freight logistics industry solve difficulties. The measures include: increasing financial support, appropriately inclining the inclusive small and micro enterprise loans to transportation enterprises and individual industrial and commercial households, and doing a good job in the continuous conversion of relevant loans after the expiration of the policy of deferred repayment of principal and interest; Help truck drivers and other key groups; Improve service efficiency; Innovative guarantee methods; Strengthen insurance guarantee, etc.
According to Luo Huanjie of Zhixin Investment Research Institute, although the manufacturing PMI continued to fall in April, with the gradual and effective control of the national epidemic and the continuous introduction of policies to stabilize expectations and increase confidence in the near future, the phased low point of manufacturing PMI may have appeared.
five aspects to stabilize foreign trade
The logistics industry is connected with production at one end and consumption at the other. The blocking and delay of logistics also restricts the production and development of foreign trade enterprises. With the increasing impact of the supply chain, the market’s concerns about China’s production and export are also intensifying.
Wen Bin said that the recent decline in foreign trade order receiving capacity may cause orders to be transferred abroad. In April, the PMI index of China’s new export orders fell 5.6 percentage points month on month to 41.6%, while Vietnam’s exports reached a record high in the past two months. This trend needs further attention.
“Take exports as an example. In 2020 and 2021, exports are an important support for China’s economic growth. Behind the high increase in exports, in addition to the strong demand brought by loose overseas monetary policy, a very important point is that repeated overseas epidemics and slow repair of supply chain have led to the transfer of global orders to China, and China’s export share has increased from 13.2% in 2019 to 15.1% in 2021.” Li Qilin said that however, with the repeated disturbance of the Chinese epidemic to the normal production and operation of enterprises, the impact of logistics congestion on the delivery capacity of enterprises, the enhanced substitution effect of the resumption of work and production in emerging markets on Chinese orders, the general devaluation of emerging market currencies, the increasing localization and short chain of international supply chains, and the decline of overseas total demand, the downward pressure on China’s exports this year began to appear gradually.
Li Qilin believes that on the one hand, this means that the policy should make efforts, grasp the planning of incremental policy tools, increase the intensity of camera regulation, and resist the pressure of external demand through the expansion of domestic demand. On the other hand, it also means to ensure smooth logistics and promote the stability of the industrial chain supply chain, which is very important to reduce the impact of the epidemic on China’s economy and stabilize the basic market of foreign trade and foreign investment.
In order to help foreign trade enterprises cope with difficulties, the national Standing Committee put forward five specific requirements. First, we should strive to maintain orders and stabilize the import and export of key industries and labor-intensive industries. Ensure the stability of production and circulation in the field of foreign trade, determine the list of key foreign trade enterprises, and guarantee production, logistics and employment; Second, we should effectively and orderly dredge the collection and distribution of sea and air ports. Make good use of air cargo capacity; Third, we should introduce policies to facilitate the return and exchange of cross-border e-commerce exports. Labor intensive processing trade in the central and western regions and Northeast China will be included in the catalogue of industries encouraged by the state. Expand the scope of bonded maintenance; Fourth, we should increase the credit supply of foreign trade enterprises, support banks not to blindly withdraw, cut off and suppress loans, and sort out a number of enterprises in urgent need of funds to give key support. Expand the scale of export credit insurance short-term insurance. Keep the RMB exchange rate basically stable; Fifth, we should optimize platform services such as the Canton Fair. All localities should make good use of the special funds for foreign economic and trade development to support small, medium-sized and micro enterprises to participate in overseas exhibitions.
