China.org.cn | March 19, 2020
Hu Kaihong:
Ladies and gentlemen, good morning. Welcome to this press conference held by the Joint Prevention and Control Mechanism of the State Council. Today we have invited Mr. Xin Guobin, vice minister of the Ministry of Industry and Information Technology, and Ms. Yang Liping, chief supervision officer of the China Banking and Insurance Regulatory Commission, who will brief you about the work to support the coordinated and orderly resumption of industrial chain operations. They will also answer your questions. First, let's hear from Mr. Xin Guobin.
Xin Guobin:
Thank you. Ladies and gentlemen, friends from the media, good morning. Since the start of the COVID-19 outbreak, the CPC Central Committee and the State Council have been assessing the situation and leading the nation to adopt unconventional measures as part of the "people's war" against the virus. As the epidemic has been effectively controlled in China, relevant adjustments have also been made promptly by the CPC Central Committee and the State Council, so as to coordinate the prevention and control efforts with continued social and economic development, and smoothly restore order in the social and economic sectors with the categorized management strategy. The coordinated and orderly resumption of industrial chain operations is of crucial importance to maintain the steady economic and social development. General Secretary Xi Jinping has stressed many times that industrial chains are closely linked in their development, and the absence of one link may hinder the operation of businesses at upstream and downstream. It is important to adhere to the principle of coordinated development, advocate the building of an integrated national market, and further promote the coordinated work resumption of small, medium and large-sized enterprises both upstream and downstream to ensure smooth resumption of production, supply, and sales. Meanwhile, the overall economic performance of these companies should be improved as the work and production resume. On March 10, Premier Li Keqiang chaired an executive meeting of the State Council, issuing instructions to further ensure the smooth running of industrial and capital chains, and promote the coordinated resumption of work and production in all sectors. All of these provide guidance and fundamental principles for companies to resume work and production.
The Ministry of Industry and Information Technology (MIIT) has been fully implementing the decisions and deployments of the CPC Central Committee and the State Council. We have adopted a holistic approach to provide guidance and strengthen supervision in our organizing efforts. We have also established clear priorities and focused on key tasks, so as to advance the coordinated and orderly resumption of industrial chain operations. On Feb. 13, the MIIT set up a leading group on the resumption of work and production. We also introduced 20 separate policies and measures supporting resumption of productive operations in small- and medium-sized enterprises (SMEs), hosted two video conferences for companies of industrial and communication sectors to share experience on this topic, and published guidelines on orderly resumption of work and productive activities in the manufacturing and communication industries. In addition, we have sent liaison officers to the industry and information technology departments in seven major industrial provinces, in order to promote the implementation of policies and solve the difficulties and specific issues put forward by companies.
Under the firm leadership of the CPC Central Committee and the State Council, and with the joint efforts and close cooperation among various sectors in different regions, the resumption of work and production has shown a positive trend with orderly progress. The average rate of work resumption among industrial enterprises above designated size outside Hubei province has exceeded 95%. On average, about 80% of staff in those enterprises have returned to work. About 60% of SMEs have resumed work and production. Nevertheless, there are still problems such as the logistical and transport difficulties, a lack of capital flow for SMEs, shortage of epidemic prevention materials, low efficiency throughout the industrial chains, as well as inconsistency of work resumption between upstream and downstream enterprises. At the same time, the spread of the virus around the world has also brought great uncertainty to the resumption of work in China.
With this in mind, the MIIT will step up efforts accordingly so as to adopt a problem-oriented strategy and make preparations for the most difficult scenarios. Based on the idea of coordinated development among enterprises of different sizes both in China and abroad, and with the joint efforts from central and local governments, the MIIT will work precisely to promote the coordinated and orderly resumption of industrial chain operations, sparing no efforts to realize an orderly flow of personnel, capital, and materials; the proper connection among production, supply, and sales, as well as facilitate the domestic and foreign trade.
First, we focused on such areas as epidemic prevention supplies, daily necessities, public utilities, spring ploughing, foreign trade and high-tech industries. We also compiled a list of large-scale leading enterprises and core supporting enterprises into batches, and encouraged leading enterprises to spur on the development of supporting enterprises.
Second, we focused on smoothing supply chains and industrial chains, clearing logistics and transportation blockages, and alleviating the problem of personnel movement, as well as the transportation of raw materials and products.
Third, we gave full play to the coordination mechanism of the State Council's leading group office on the promotion of SME development, and pushed forward the introduction of monetary, taxation, financial, innovation, social security, employment and other support policies to help SMEs overcome difficulties.
Fourth, in accordance with the requirement that "provincial-level governments assume overall responsibility," we promoted the work of provincial-level joint prevention and control mechanisms, classifying counties into three levels, namely: low, medium and high risk. Then we clearly established the situation and carried out policies precisely.
Fifth, we focused on enhancing the risk-prevention capabilities of foreign trade companies and strengthening such key industrial chains as automobiles, medicine and electronics to improve the stability of the global industrial chain and supply chain.
Next, the MIIT will implement the spirit of the State Council's executive meeting on March 10, focus on the core industrial chains, enhance overall coordination, key links and policy implementation, boost growth momentum, and ensure the industrial chain resumes production in a solid and orderly manner. We will reduce damages and losses caused by the epidemic as much as possible, and endeavor to keep the industrial economy running within a reasonable range.
That's it for my introduction. Thank you.
Hu Kaihong:
Thank you, Mr. Xin. Next, Ms. Yang Liping, please make your introduction.
Yang Liping:
Thank you. Ladies and gentlemen, friends from the media, good morning. Since the COVID-19 outbreak, the China Banking and Insurance Regulatory Commission (CBIRC) has thoroughly studied and implemented the important instructions made by General Secretary Xi Jinping. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we have issued nine documents, either by ourselves or jointly with other departments, to provide financial services for the epidemic prevention and control work and for economic and social development.
First, we have strengthened credit support in key areas. In the first two months of this year, RMB loans from financial institutions increased by 4.2 trillion yuan (US$0.6 trillion). Currently, the credit support provided by banking financial institutions to fight the epidemic has exceeded 1.4 trillion yuan. We have also further increased financial support for private companies, and micro and small enterprises, as well as credit availability for manufacturing, spring farming and other fields.
Second, we have supported banks to implement temporary deferred debt-and-interest payment arrangements for enterprises in difficulty affected by the epidemic. We have asked banking financial institutions to refrain from seeking early repayment of loans, delaying loans, or stopping loans for micro, small and medium-sized enterprises (MSMEs, including entrepreneurs of micro and small enterprises and self-employed business owners) that have been affected by the epidemic and are now temporarily encountering difficulties. In accordance with the principles of marketization and rule of law, a temporary delay in the repayment of principal and interest has been implemented on loans due since Jan. 25. For personal business loans, including those to truck drivers, taxi drivers and other special groups, as they lost business during the epidemic, they have also had difficulties repaying the loans used to purchase vehicles. The individual business loans for these groups can refer to the policy for self-employed business owners, so that they can also enjoy the policy. We will make flexible adjustments to such personal loan repayment arrangements.
What I want to explain here is that the second point is regarding stock, while the first point, you may have noticed, is regarding increments. The second point is about existing loans that have already been made but cannot be repaid on time due to the epidemic. As such, the banks have made temporary repayment arrangements for the principal and interest. I would especially like to note that temporary repayment arrangements are not automatic extensions, but require an application from the lender, who is willing to extend it, and also the application needs to be reviewed by the bank.
Third, we will actively encourage insurance institutions to help enterprises overcome any difficulties they may encounter. By way of reducing fees, duly delaying payment of premiums, insurers are encouraged to bolster their support for all kinds of enterprises in terms of property, liability, export credit insurance etc. Premiums for vehicles, ships, and planes whose operation is suspended due to the epidemic will be appropriately reduced. When risks can be managed, we encourage life insurance companies to moderately extend the term of policy loans and increase their amount to help customers ease short-term funding pressure. For owners of small business or self-employed business who bought life insurance, they can pledge their policies. In the past, the pledge basically lasted for six months and the pledge rate was about 80%. During the epidemic prevention and control period, the policy loan period can be appropriately extended, depending on individual situations.
Yang Liping:
Recently, in accordance with the requirements of the 85th Executive Meeting of the State Council, we undertook timely research and implemented the key roles of the financial sector to support the coordinated resumption of industrial chain operations.
First, we will strengthen the support for crucial enterprises in any industry chain. We will guide banking institutions to actively cooperate with key companies of the industry chain, enhance support for liquidity loans, and give reasonable lines of credit. After the key enterprises gain finance via credit, bonds, etc., we encourage them to pay cash to upstream and downstream enterprises in the way of prepayment, so as to reduce the pressure on SMEs in terms of their cash flow and financing costs.
Second, we will optimize the financial services of upstream and downstream enterprises in industrial chains. We will guide banking institutions to pay attention to needs of upstream and downstream enterprises in any industrial chain when they resume work and production. Banks should support enterprises to finance by means of accounts receivable, warehouse receipts and inventory pledges. At the same time, we will promote the work of banks in appropriately reducing the proportion of acceptance bills for creditworthy enterprises. These measures will also help to increase the cash flow of enterprises and enhance their liquidity.
Third, we will strengthen the coordinated development of the global industrial chain. We will promote banks to play their role in stabilizing foreign trade and ensure resources allocation in regard to trade, financing and credit. The incentive mechanism will be improved and more foreign trade loan will be granted. We will ensure that relevant policies will be implemented properly, including deferring repayment of the principal and payment of interest on loans. For promising SMEs affected by the epidemic, the repayment period can be extended. It is known that, according to the policy, interest payments can be deferred to June 30; however, for heavily-hit enterprises that need a longer time to recover, they can negotiate with the banks about further deferring paying principal and interest, especially the former promising SMEs severely affected by the epidemic may extend their repayment beyond June 30, after negotiating with their bank. There will be case-by-case negotiation. We will support commercial insurance companies to develop short-term export credit insurance business and reduce the rates.
Fourth, we will use financial technology to optimize the supply chain financing services. We will encourage qualified banking institutions to develop supply chain business systems. By connecting with crucial enterprises and government departments, combining online and offline methods, they can provide customers involved in a chain with more convenient and efficient supply chain financing services. We will encourage policy banks and commercial banks to strengthen business cooperation with private banks mainly relying on the internet to operate to provide targeted financing services for SMEs and improve the availability for those resuming work and production to apply for loans. Private banks that rely mainly on the internet have access to huge amount of big data but they don't have enough branches, therefore, their sources of funds, especially deposit funds, are not as large as traditional commercial banks. Thus, we encourage policy banks and commercial banks to lend them money, give them funds, and, at the same time, use their big data, because the private banks have a good understanding of their customers that are mainly SMEs, as well as self-employed business owners. In this way, we can reach out and give targeted support to these businesses.
Looking forward, the CBIRC will step up financial support for epidemic prevention and control as well as economic and social development in accordance with the decisions and plans issued by the CPC Central Committee and the State Council. We will intensify efforts to make financial sector better serve the real economy and urge banking and insurance institutions to fully implement relevant financial policies and measures. Thank you.
Hu Kaihong:
Thank you, Ms. Yang. We are now open to questions. Please identify your news outlet before asking questions.