China’s Economic Reopening in the Pandemic era

2. Intensify macro- polic y management. China continues to step up the macroeconomic policy adjustments. In order to promote reproduction and help enterprises solve problems, various ministries around the country have precisely and timely launched 90 policies in 8 areas, including raising the local government’s special debt limit, reducing taxes and fees, providing special credits, expanding the scale of re- lengding and re- discounting, targeted requirement reserve ratio cuts – promoting consumption, and other fiscal, taxation, financial, social security measures to help the enterprises, especially the small and medium- sized enterprises, to reopen.

Since the beginning of this year, the taxes and fees have been further cut down by 318.2 billion yuan. The financial sector have provided 3.55 trillion yuan of low- cost funds to financial institutions through three times of RRR cuts, re- lending and re- discounting measures, which in turn benefited more than 2.5 million small and medium- sized enterprises. In response to such problems as the shortage of labor in enterprises, the retention of migrant workers, and the difficulty in graduates obtaining jobs, the relevant ministries and local administrations have issued a number of policies and measures to reduce burden, stabilize jobs, and expand employment. Some actions include increasing employees’ guarantee and unemployment insurance, online recruiting, online training, and so forth. They strengthened the connection between supply and demand sides in the labor market, and injected a string of guarantee into the enterprises and the people.

Beijing launched “customized buses” to provide commuters with the customized public transportation. Shanghai launched “point-to-point” inter- provincial special vehicles to take the workers back to the construction site. Heilongjiang, Hebei, Qinghai and other places have implemented the “One code pass”, a code scan service invented by Tencent company, and facilitated the workers to travel across different regions. At present, the labor market continues to warm up. The labor force of manufacturing enterprises has increased for two consecutive months. More than 100 million migrant workers have returned to work.

3. Secure the industrial and supply chains. The Chinese government asked the large companies to help the small ones, the upstream business to coordinate with the downstream ones, the domestic enterprises to interact with the foreign ones. China focused on the key industrial chains, and guided the leading companies to improve the resumption of the entire industrial chain. Some industries like automobiles and electronics share the feature of a long, highly refined, and deeply interdependent supply chain system, and have a positive influence over the manufacturing sectors. Some industries like the agricultural machinery are the basic industries. Some industries are relevant to the people’s livelihood, such as the agricultural and sideline food processing, etc. Some industries have a direct impact over the stability of the global supply chain, such as the active pharmaceutical ingredients industries. For those industries listed above, the Chinese government keeps on sorting out a list of leading enterprises and their core supporting enterprises, dynamically adjusts and promotes their resumption, helps them solve the practical problems and overcome difficulties, and finally pushes forward the effective execution of the whole industry chain.

Taking Jiangsu Province as an example, the relevant ministries pooled a list of 491 leading enterprises, and helped resume the work of more than 1,400 enterprises in the supply chain, through the coordination of ministries, provinces, cities and the Yangtze River Delta region.

Some foreign trade companies faced problems like cancellation or extension of orders, difficulties in signing new orders, poor logistics and transportation, etc. ( To be continued on May 30, 2020)