Box 2: Progress in Implementing Epidemic Relief Policies for Enterprises

Tax and Fee Cuts	Ÿ While implementing institutional policies such as lowering VAT rates and the share of employees’ basic old-age insurance paid by enterprises, we also rolled out 28 tax and fee reduction policies in seven batches, promptly introduced time-limited measures, including exempting micro, small, and medium enterprises from social insurance premiums and reducing or exempting VAT on small-scale taxpayers and for certain sectors, and postponed payment of corporate income taxes by MSEs and self-employed individuals, in an effort to overcome the impact of the epidemic. These policies and measures played a crucial role in sustaining over 100 million market entities, in boosting market dynamism, and in facilitating growth in corporate profits.
Lowering Financing Costs	Ÿ We created two monetary policy instruments which proved able to directly serve the real economy: an instrument to allow MSEs to postpone repayments on inclusive loans, and the credit loan support program. Ÿ In 2020, the banking sector deferred repayments of principal and interest for 7.3 trillion yuan worth of loans, and granted 3.9 trillion yuan of inclusive credit loans to MSEs. Ÿ More loans were granted to a greater number of MSEs at lower costs. By the end of 2020, the balance of inclusive loans for MSEs was 15.1 trillion yuan, an increase of 30.3%, which benefited 32.28 million businesses. The interest rate on newly-issued inclusive loans for MSEs was 5.08% in December 2020, 0.8 percentage points lower compared to the same period of the previous year. Ÿ By the end of 2020, outstanding medium- and long-term loans to manufacturers totaled approximately 5.26 trillion yuan, an increase of 35.2%.
Lowering Logistics Costs	Ÿ We implemented 12 measures in six different categories to develop the logistics industry to address the impact of Covid-19. Ÿ The State Council forwarded the Guidelines on Further Reducing Logistics Costs compiled by the National Development and Reform Commission and the Ministry of Transport, and rolled out 24 policies and measures to reduce institutional costs, the cost of factors of production, fees and taxes, information costs, multimodal transportation costs, and overall costs. Ÿ We formulated the Guidelines on Fostering an Enabling Environment to Promote the Distribution of Fresh Agricultural Products, and introduced 12 policies and measures relating to operating costs, financial support, land use and office use, the business environment, and development of larger and stronger enterprises, to address prominent problems in the distribution of fresh agricultural products that are hindering the development of enterprises and private enterprises in particular.
Time-limited Policies to Reduce Costs	Ÿ Electricity costs for enterprises: We published the Notice on Implementing Two-Part Tariff in Electricity to Reduce Enterprise Electricity Costs during Epidemic Prevention and Control, as well as the Notice on Temporarily Reducing Enterprise Electricity Costs to Support the Resumption of Work and Production, which mandated the implementation of two-part tariff in electricity before June 30, 2020; and a 5% cut in the price of electricity for all industrial and commercial users, with the exception of energy intensive businesses, from February 1 to June 30, followed by an extension of this policy to the end of 2020. Ÿ Gas costs for enterprises: We published the Notice on Temporarily Reducing Non-Household Gas Costs to Support the Resumption of Work and Production, which required that from February 22 to June 30, when the government-set price on non-household gas was applied, upstream gas suppliers must lower their prices so that they were essentially in accordance with the city gate price; more preferential gas prices were offered to agriculture-related industries seriously affected by Covid-19 such as chemical fertilizer businesses. Upstream gas suppliers and downstream gas users were encouraged to negotiate lower gas prices when pricing controls over gas were lifted. These measures have saved enterprises over eight billion yuan in gas costs. Ÿ Transportation costs: We lowered airport charges and air traffic control charges during the epidemic; temporarily exempted airlines from payments to the civil aviation development fund; temporarily reduced or eliminated tolls on highways; lowered, or eliminated port-related fees and fund contributions; and halved charges for railway freight value-insured transportation, demurrage, and truck detention fees. Ÿ Charges for credit investigation services: We published the Notice on Temporarily Reducing or Exempting Charges for Certain Credit Investigation Services, as well as the Notice on Extending the Policy for Temporarily Reducing or Exempting Charges for Certain Credit Investigation Services, which required business-related charges for certain credit investigation services be lowered or waived from March 1 to the end of 2020.
Policies for Reducing, Exempting, and Postponing Payment of Social Insurance Premiums	Ÿ We issued the Notice on Temporarily Reducing or Waiving Enterprises’ Social Insurance Premiums, the Guidelines on Temporarily Reducing Enterprise Payments to Basic Medical Insurance for Urban Workers, and the Notice on Extending the Policy for Temporarily Reducing or Waiving Enterprises’ Social Insurance Premiums. Ÿ In 2020, a total of 1.7 trillion yuan in payments to basic old-age insurance, unemployment insurance, and workers’ compensation schemes were reduced or waived for enterprises.

 

3) The expectations of market entities remained stable and positive.

We promptly put in place and constantly improved nationwide epidemic information-sharing mechanisms, released authoritative epidemic information in an accurate and transparent manner, and effectively ensured the continuation of normal production and daily life activities.

We gave full play to the role of macro-policy coordination mechanisms and consultation mechanisms between major provinces and cities in order to ensure stability on the six fronts and security in the six areas. Policy coordination between central and local authorities and between departments was also strengthened. The macroeconomic governance system was improved, and our policies became more stable, predictable, and transparent. We offered timely explanations of developments and policies, actively responded to public concerns, and maintained the confidence of market entities.

3. We made solid progress in the three critical battles, [2] and achieved the main targets and accomplished the main tasks on schedule.

We implemented policies to solve prominent problems and strengthen weak links, completed all goals and tasks for fighting poverty, stepped up efforts to address pollution, and effectively prevented and controlled major risks.

1) We won a complete victory in the battle against poverty.

We listed all the counties and villages which had not yet eliminated poverty in order to oversee their poverty-alleviation efforts, and channeled poverty-alleviation funds toward deeply impoverished areas such as the three regions and the three prefectures.[3] To offset the impact of Covid-19 and flooding on poverty alleviation, we prioritized efforts to support impoverished workers in finding jobs, and expanded work-relief programs through multiple channels. We increased support for poverty alleviation by boosting local industries and employment, ensured better linkage between production and sales, strengthened science and technology-based assistance, launched programs to boost the consumption of goods produced in poor areas, and promptly implemented measures to ensure that people’s basic living needs are met. We rolled out follow-up support policies and measures for relocated families, and completed the task of relocating over 9.6 million people from inhospitable areas during the 13th Five-Year Plan period.

We worked to consolidate the progress already achieved in guaranteeing access to compulsory education, basic medical services, and housing for rural poor populations. We coordinated the development of basic medical insurance, major disease insurance, and medical assistance programs to ease the burden of medical expenses for poor populations. Final-phase projects to renovate dilapidated rural houses were completed on schedule. All people who were formerly living below the current poverty line now have access to safe drinking water. We conducted a nationwide poverty reduction survey, and improved monitoring and support to prevent people from falling back into poverty.

The 98.99 million rural residents formerly living below the current poverty line were successfully lifted out of poverty, and poverty has been eliminated in all of the 832 impoverished counties and the 128,000 poor villages. Both extreme poverty and regional poverty have therefore been eradicated.