MNI China Press Digest, Feb 26: VAT Cuts, CBIRC, Consumption

     BEIJING (MNI) - The following lists highlights from Chinese press reports

on Wednesday:

     China will exempt the value-added tax for small-scale taxpayers in Hubei

province, the epicentre of the coronavirus outbreak, and lower the tax rate to

1% from 3% in other regions from March to May, according to a government

statement. The announcement on http://gov.cn cited the State Council executive

meeting late Tuesday, and said China would also add CNY500 billion in

refinancing and through rediscount quotas, mainly to increase small and medium

banks' credit support for small firms. Policy banks would increase CNY350

billion in special credit lines, which would be issued to private and small

companies at preferential interest rates, according to the statement.

     The PBOC and the China Banking and Insurance Regulatory Commission (CBIRC)

will use a variety of policy tools to maintain sufficient liquidity and will

encourage commercial banks to provide differentiated credit arrangements for

small and medium-sized enterprises, the People's Daily reports. The Daily cites

Guo Shuqing, the head of the CBIRC, who said various measures had been taken to

guide the financial industry to fully support the resumption of production,

while firmly avoiding systemic financial risks.

     The CBIRC has asked banks to offer forbearance to small and medium

enterprises until the end of June, according to Xiao Yuanqi, the spokesman for

the authority. Quoting Xiao, the Securities Times reports that the CBIRC has not

changed its tight policy on financing for real estate developers, while policy

details for some banks have been tweaked under the basic framework.

     A leading Chinese newspaper has advocated the Government issue vouchers to

consumers to stimulate demand to offset the economic impact of the coronavirus

epidemic. In a front-page commentary, Securities Times says consumer vouchers

would be an unconventional short-term stimulus, and the Government should also

be alert to fiscal and inflationary pressures at the same time. The Times said

the distribution of any vouchers should be limited and the cash process strictly

controlled to avoid chaos, such as acquisition by merchants.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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