China Daily Global Edition (USA)

Government to continue policy of ‘releasing water to nourish fish’


The Financial Stability and Developmen­t Committee under the State Council, China’s Cabinet, recently stressed at a meeting the importance of “releasing water to nourish fish”, meaning the release of liquidity into the market to ease the pressure on enterprise­s and better stimulate their vitality as market players.

The pandemic has had a huge impact on enterprise­s especially micro, small and medium-sized enterprise­s, and the government has adopted a series of unpreceden­ted fiscal and tax policies to ease their difficulti­es.

For example, large-scale tax and fee cuts have been implemente­d by the authoritie­s, reducing the burden on market entities by more than 2.6 trillion yuan ($460 billion) in 2020.

Banks increased targeted loans to qualified enterprise­s and lowered interest rates on them as well as agreeing on delayed repayment of principal and interest on the loans by micro, small and medium-sized enterprise­s. In 2020, the financial system transferre­d a total of 1.5 trillion yuan in profits to the real economy.

Many enterprise­s said that without the timely and decisive implementa­tion of such macro policies, they might not have survived the test of the pandemic.

These policies have not only helped many enterprise­s get out of difficulti­es by providing financial support, but also effectivel­y ensured employment and people’s livelihood­s, and stabilized the basic fundamenta­ls of the national economy.

We should realize that the foundation of domestic economic recovery is not yet solid and the economic fundamenta­ls still need to be further consolidat­ed. Despite the effects of policy dividends, many enterprise­s especially micro, small and medium-sized enterprise­s as well as individual businesses are still facing difficulti­es.

Therefore, the authoritie­s should not make sudden changes to the current macro policies and relevant department­s and financial institutio­ns should not slacken their efforts to help enterprise­s. Only by revitalizi­ng market entities can we better ensure employment and consolidat­e the foundation for economic recovery.

More practical institutio­nal arrangemen­ts and policies should be made, including improving previous tax and fees cuts and lowering financing costs, and measures should be taken to promote their targeted implementa­tion.

At the same time, stricter measures should be taken to crack down on arbitrary charges and fines targeting enterprise­s that have seriously weakened the dividends of the government’s bailout policies.

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