Hu Kaihong:
Ladies and gentlemen, friends from the media, good morning. Welcome to the press conference of the State Council's inter-agency mechanism to tackle the novel coronavirus-related pneumonia outbreak. We have invited Mr. Yu Weiping, vice minister of finance; Mr. Pan Gongsheng, deputy governor of the People's Bank of China and director of the State Administration of Foreign Exchange; Mr. Wang Daoshu, chief auditor of the State Taxation Administration; and Mr. Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission. They will speak on the fiscal policies China has to support the prevention and control of the epidemic and alleviate the difficulties of small and micro enterprises in accessing affordable financing as well as answer your questions.
First, I'll give the floor to Mr. Yu.
Yu Weiping:
Ladies and gentlemen, friends from the media, good morning. The Communist Party of China (CPC) Central Committee and the State Council are paying great attention to the prevention and treatment of the novel coronavirus-related pneumonia. General Secretary Xi Jinping chaired a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on the prevention and control of the epidemic, and gave important instructions, stressing that all our work should support the fight against the epidemic. Premier Li Keqiang chaired the meetings of the central leading group on tackling the epidemic outbreak and made clear that epidemic prevention and control is the most important priority at present.
Under the strong leadership of the CPC Central Committee and the State Council, the Ministry of Finance has launched a series of measures including funding and policy support since the outbreak, which are mainly as follows.
In terms of funding support, as of 5 p.m. on Feb. 6, governments at all levels allocated a total of 66.74 billion yuan to epidemic prevention and control, with an actual expenditure of 28.48 billion yuan. Of this amount, 17.09 billion yuan came from the central government, among which, 5.7 billion yuan were used as subsidies for epidemic prevention and control, including 1.8 billion yuan for subsidies for the priority province of Hubei, and 9.95 billion yuan was for basic public health services and epidemic prevention and control at the grassroots level. A sufficient amount of funds was also allocated for scientific research and supply reserves. At present, funds for epidemic prevention and control work in various localities have been guaranteed. The central government is also continuing its efforts to ensure that there are sufficient funds and that they are well managed and used in the fight to prevent and control the outbreak.
In terms of policy support, as of Feb. 6, the Ministry of Finance, in cooperation with other government departments, has rolled out over 10 fiscal and tax policies, which mainly include the following.
First, governments will identify the treatment costs. For the patients infected with the virus, 60% of their personal treatment costs will be subsidized by the central government. Localities where suspected cases seek medical treatment will formulate their own subsidy policies, and the central government will provide a proper amount of subsidies depending on the circumstances.
Second, compensation policies for work-related injuries will be extended to staff working in fields related to epidemic prevention and control.
Third, the central government will provide a fixed amount of temporary work subsidies to medical and health personnel doing epidemic prevention and control work on the frontlines.
Fourth, we simplified the approval procedures for governments' procurement of epidemic prevention and control supplies and opened up "green channels" for the transportation of supplies.
Fifth, we worked out a plan to give out bank loans with discount interest rates for storage companies of medical supplies with a shortage of funds.
Sixth, supplies donated for epidemic prevention and control-related work will be exempt from import duties, consumption tax and value-added tax if they are imported goods.
Seventh, prevention and control supplies imported by health departments will be exempt from import duties.
Eighth, government financing guarantee and re-guarantee institutions at all levels will remove counter-guarantee requirements for companies greatly affected by the epidemic. They will also reduce their financing guarantee and re-guarantee premiums. For the financing guarantee and re-guarantee institutions in the areas seriously affected by the epidemic, the state financing guarantee fund will help to halve the re-guarantee premiums.
Ninth, individual entrepreneurs who are infected with the novel coronavirus can enjoy a one-year extension for guaranteed loans as well as discounted interest rates during the extension period.
Tenth, the central government will provide discounted interest rates to key companies involved in epidemic prevention and control work.
At the same time, we have allocated more treasury funds to guarantee grassroots-level epidemic prevention and control, salaries, operations and basic living standards of working staff and the general public. We have issued notices asking financial departments at all levels to put the safety and health of the people first, implement various policies and increase funding support. This is to dispel people's worries about the cost of seeing a doctor and to ensure that medical treatment and epidemic prevention and control in various localities are not affected by a shortage in funding. In addition, through this, we want to make sure that policies are implemented, work is deployed, budgets are in place, funds are allocated and the necessary supervisory measures and management systems are all in place.
The State Council executive meeting on Feb. 5 decided to roll out a slew of new fiscal, taxation and financial policies to ensure supplies for the epidemic prevention and control work on top of the previously introduced measures. The major policies are as follows:
First, enterprises producing key anti-epidemic supplies will enjoy a one-time pre-tax deduction for new equipment purchased to expand their production capacity.
Second, taxpayers will enjoy value-added tax (VAT) exemption for their income earned from transporting key anti-epidemic supplies.
Third, enterprises producing key anti-epidemic supplies will have all of their incremental VAT credits refunded starting from Jan. 1, 2020.
Fourth, registration fees for drugs and medical devices related to the prevention and control of the novel coronavirus will be waived.
Fifth, for companies involved in transportation, catering, accommodation, tourism and other sectors which are greatly affected by the epidemic, their losses logged in 2020 can be carried over for an additional three years on top of the current carry-forward timeframe of five years.
Sixth, taxpayers can enjoy VAT exemption on income from shipping key anti-epidemic supplies and providing public transportation services, living services, and delivery services for daily necessities.
Seventh, the civil aviation development fund will be waived for all civil aviation enterprises.
Eighth, enterprises and individuals that donate anti-epidemic medical supplies to hospitals via non-profit social organizations or through direct means, can fully deduct the value of their donations from their tax returns. Goods donated by various units and self-employed people for the prevention and control of the pneumonia outbreak will be exempt from VAT, consumption tax, urban maintenance and construction tax, and education and local education surcharges.
Ninth, for medical staff and other personnel participating in the prevention and control of the epidemic, temporary work subsidies and bonuses they receive in accordance with the standards prescribed by the government, as well as medicines, medical supplies and protective supplies offered to them by their organizations, will not be included in their wages and salaries, and are exempt from individual income tax.
Tenth, we will increase subsidies to lower the interest rates of loans. We will give a 50% discount to ensure that the interest rate stays below 1.6% for key enterprises in the production, shipment and sales of medical supplies and daily necessities for the prevention and control of the epidemic.
Eleventh, enterprises have been encouraged to step up the manufacturing of urgently needed key medical supplies, guaranteeing both their quality and quantity. The excess medical supplies they produce will be procured by the government as reserves.
At present, we are still at a crucial stage in preventing and controlling the epidemic. The above policies will play an important role in lowering production, operation and financing costs of relevant enterprises and increasing supplies of anti-epidemic materials and medical products. The policies will also help our enterprises overcome difficulties and mobilize various social resources to offer stronger support in our battle against the novel coronavirus.
Currently, we are working with different departments to prepare and issue operational documents, and we will work hard to ensure that our policies can be fully implemented and their effectiveness brought into play.
Thank you!
Hu Kaihong:
Thank you, Mr. Yu. Next, let's give the floor to Mr. Pan Gongsheng, deputy governor of the People's Bank of China (PBOC) and administrator of the State Administration of Foreign Exchange.
Pan Gongsheng:
Friends from the media, good morning. First of all, on behalf of the State Administration of Foreign Exchange of the PBOC, I would like to extend my sincere thanks to your support for our work in the financial sector.
Since the outbreak of the novel coronavirus (2019-nCov), all institutions in China's financial sector have resolutely implemented the important instructions of General Secretary Xi Jinping, as well as every decision made by the CPC Central Committee and the State Council. In accordance with the deployment of the leading group of the CPC Central Committee on the prevention and control of the novel coronavirus outbreak and the guidance of the State Council's Financial Stability and Development Committee, we have prioritized the prevention and containment of this epidemic, sparing no effort to provide financial support to fight this outbreak.
First, we have been working to maintain sufficient liquidity in the financial system. As required during a meeting of the State Council's Financial Stability and Development Committee, the People's Bank of China launched open market operations on Feb. 3 and 4 that exceeded expectations, and injected a total of 1.7 trillion yuan of liquidity in these two days. This aims to maintain liquidity in the banking system at a reasonably sufficient level during this critical period of epidemic prevention and control, intensifying counter-cyclical adjustment and further stabilizing market expectations.
Second, the currency, stock, bond and foreign exchange markets have re-opened on schedule and have remained stable. We will step up and further strengthen our service in the financial market infrastructure, ensuring the daily business operations of the domestic financial market, such as issuance, trading, clearing and account settlement, to name a few. Thus, the financial market will continue to run in a stable and effective manner. In terms of the stock and foreign exchange market, after the major adjustment on the first day it re-opened, the stock market has rebounded and stabilized over the course of the past few trading days. The RMB exchange rate has also maintained two-way fluctuations that are within a reasonable and balanced range. All of these developments demonstrate the improved resilience of China's financial market which is becoming more mature.
Third, we have strengthened our efforts to provide financial support to the prevention and control of the epidemic, to ensure people's livelihood and support the stable development of the real economy. On Feb. 1, 30 policies and measures were introduced jointly by the PBOC, the Ministry of Finance, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange. These policies require that financial institutions, namely banks, bond and insurance institutions, improve their financial services. They are required to offer services in financial market infrastructure, including those related with treasuries, foreign exchange, cash, credit and payments. Their business processes also need to be simplified and certain costs reduced, so as to maintain the continuity of financial services and make it more convenient. The PBOC set up a special loan has provided relending funds of 300 billion yuan (about US$ 42.98 billion), implemented preferential interest rates, and strengthened financial support to key medical suppliers as well as suppliers of daily necessities. We will also continue giving financial support to key sectors including small and micro-businesses, private enterprises, and the manufacturing industry. In addition, we will increase credit loans, medium- and long-term loans and reduce overall financing costs. We will still guarantee loan services to those businesses facing financing difficulties amid the epidemic.
The policies and measures taken by China's financial authorities in response to the 2019-nCoV have been fully recognized by the financial market and all sectors of our society. They are also highly regarded by the International Monetary Fund, the World Bank, as well as the global financial industry. It is generally believed that the impact of the 2019-nCoV is temporary and limited. China's economy will continue to demonstrate its great resilience, and the Chinese government has sufficient room to adjust its policies to bolster the stable growth of its economy.
Next, under the strong leadership of the CPC Central Committee, all institutions in the financial sector will thoroughly implement the work deployment of the leading group of the CPC Central Committee on the prevention and control of the novel coronavirus outbreak. Under the guidance of the State Council's Financial Stability and Development Committee, we will work to implement the 30 policies and measures to provide financial support to the prevention and control of the epidemic, intensify counter-cyclical adjustments to maintain the stability of the financial market, and further increase financing support to the areas severely affected by the epidemic. Thus, we will be able to better satisfy the people's basic need for financial services, and promote the continuous and positive development of the national economy. Thank you.
Hu Kaihong:
Thank you, Mr. Pan. Next, let's invite Mr. Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, to give us a briefing.
Zhou Liang:
Friends from the media, good morning. The novel coronavirus pneumonia, featuring an abrupt outbreak and extensive spread, has been affecting people's health and threatening their lives. At present, winning the battle of epidemic prevention and control is our top priority. Facing the increasingly critical epidemic situation, it is incumbent upon our financial system to play a more active role in the fight against the epidemic. We will implement the "two upholds" through practical actions, resolutely upholding General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely upholding the Party Central Committee's authority and its centralized and unified leadership.
The China Banking and Insurance Regulatory Commission (CBIRC) has firmly implemented the important instructions by General Secretary Xi Jinping and subjected itself to the Party Central Committee's unified leadership. Working under the CPC Central Committee leading group on the prevention and control of the novel coronavirus outbreak and the State Council joint prevention and control mechanism, we have enhanced our political stance and put the prevention and control of the disease as our first priority. Guo Shuqing, chairman of the CBIRC and secretary of the CPC CBIRC Committee, has placed great importance on this. On Jan. 21, he gave immediate instructions regarding the suspected cases of the novel coronavirus infection at an outlet of the Agricultural Bank of China in Wuhan city, requiring staff to isolate and observe themselves for symptoms in the confines of their homes to curb the spread of the virus. On Jan. 23, the CPC CBIRC Committee made arrangements for all relevant departments and associations to keep a close eye on the epidemic situation and ensure the timely delivery of financial services. On Jan. 26, the CBIRC issued a notice to all the institutions within the system, requiring them to fully cooperate with the epidemic prevention and control work. Later, the CBIRC jointly worked with the People's Bank of China and other relevant departments and ministries to adopt a series of policies and measures to curb the spread of the virus in the financial system, as well as to encourage the banking and insurance industries to provide strong financial support toward the prevention and control of the epidemic.
The banking and insurance institutions have borne the weight of responsibility and taken an active and people-centered approach in fighting the epidemic. We have adopted strong and effective measures and made all-out efforts to meet the funding needs of the prevention and control work. We have also improved financial services, proactively cut fees and made interest rate concessions, accelerated insurance claim settlements and donated money and goods. As a result, notable progress has been made. Also, we have taken firm action to forestall and defuse financial risks and sustained the steady and healthy operation of the banking and insurance industries to improve their vitality, competitiveness, resilience and ability to fend off risks, and vigorously safeguarded financial safety and market stability.
The fight against the epidemic is now ongoing, and we will soon see the light at the end of the tunnel. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, we have every confidence that we will win the battle against the epidemic by working as one and fighting in unison. Thank you.
Hu Kaihong:
Thank you, Mr. Zhou. Now, let's move on to questions. Please identify which media outlet you work for before asking your questions.
