China says it will take targeted, forceful steps to support the economy
BEIJING, May 23 (Reuters) - China will broaden its tax credit rebates, postpone social security payments and loan repayments, roll out new investment projects and take other steps to support the economy, state television quoted the cabinet as saying on Monday.
Chinese policymakers have pledged to step up support for the world's second-biggest economy, hit by COVID-19 outbreaks that have prompted stringent restrictions, severely disrupting supply chains and hitting production and consumption.
China would strive to bring its economic operations back onto a normal track with a package of targeted, forceful and effective measures, the cabinet said.
"At present, the downward pressure on the economy continues to increase and it's very difficult for many market entities," the cabinet was quoted as saying after a regular meeting.
Many private-sector economists expect the economy to shrink this quarter from a year earlier, compared with first quarter's 4.8% growth.
Among the agreed new steps, the government will provide tax credit rebates to more sectors, raising annual tax cuts by more than 140 billion yuan ($21.06 billion) to 2.64 trillion yuan, the cabinet was quoted as saying.
China will also reduce some passenger car purchase taxes by 60 billion yuan, state media said.
Authorities will postpone social security payments, including pension insurance premium payments, by small firms, individual businesses and some severely distressed sectors till the end of this year, the cabinet said.
The deferred payments are expected to reach 320 billion yuan this year, it added.
Banks will also postpone repayments of some loans, including auto and consumer loans, by small firms and individuals in difficulties, the cabinet was quoted as saying.
The national financing guarantee fund will boost its reinsurance businesses by over 1 trillion yuan this year, it added.
China will also launch a number of new projects in water conservancy, transport, and urban shantytown renovation, and will kick off some new energy projects, the cabinet said.
The cabinet also pledged to increase domestic and international passenger flights in an orderly way.