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14-05-2020

Offering Fuel in Snowy Weather”: China’s Comprehensive Support Policy in Response to the COVID-19 Pandemic

The Covid -19 pandemic is having a profoundly negative impact on people’s livelihoods, on companies of all sizes and on economic growth all over the world. Globally, governments have been taking various measures to help citizens and businesses to cope with Covid -19. China was the first country to be confronted with the coronavirus. Under the aggressive and strict measures taken by the Chinese government, the coronavirus has been slowed and eventually contained to a high degree. A direct consequence of such measures is that the world’s second-largest economy has been almost completely closed during the first three months of this year. All of its headline metrics—from revenue to profits—sank into contraction territory, a result never seen in its decade of tracking.

How does Chinese economy reopen? The answer is not easy. Chinese government has made initial attempts to respond to this question. To cushion businesses from the coronavirus impact, Chinese central and local government have been rolling out a package of supporting policies which include policies on taxation, social security, financing incentives, fiscal subsidies, and cost reduction of energy and rent. This package of supporting policies is intended to ‘offer fuel in snowy weather’ to business, including foreign invested enterprises, enabling them to overcome difficulties and maintain a stable operation. 

In the overview below, we provide a consolidated list of supporting policies released mainly by the central government and its bodies so far. We will continue to update this list in the coming months, so stay tuned to our newsletters and receive regular updates on new regulations that could affect your business.

  1. TAX Burden Relief
  2. Social Security Insurance & Housing Fund Contribution Burden Relief
  3. Financing Incentives
  4. Fiscal Subsidies (subject to regional policies with Beijing and Shanghai policies listed)
  5. Energy Cost Reduction
  6. Rental Reduction ((subject to regional policies with Beijing and Shanghai policies listed)

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