Sum of Measures 1—5 (Total Package)
|Measure||Amount (Local)||Amount (USD)||Details||Update||Source|
|01 - Liquidity Support info_outline||CNY3,000,000,000,000||USD427,467,784,473|
|01A - Short-term lending info_outline||CNY3,000,000,000,000||USD427,467,784,473||
(i) CNY1.8 trillion for the expansion of re-lending and re-discounting facilities to support manufacturers of medical supplies and daily necessities, micro-, small- and medium-sized firms and the agricultural sector at low interest rates; (ii) In order to keep the liquidity stable, the People’s Bank of China (PBOC) conducts reverse repo operations with peak amounts (since February 3, 2020) of CNY900 billion (for 7-day maturity and CNY300 billion (for 14-day maturity). On 14 August, PBOC conducted reverse repos in the amount of CNY150 billion (for 7-day maturity) at an interest rate of 2.2 percent .
|01B - Support policies for short-term lending info_outline||
No amount/estimate: (i) Targeted reserve requirement ratio cuts by 50-100 bps for large- and medium-sized banks that meet inclusive financing criteria which benefit smaller firms, an additional 100 bps for eligible joint-stock banks, and 100 bps for small- and medium-sized banks in April and May to support SMEs; (ii) reduction of the 7-day and 14-day reverse repo rates by 30 and 10 basis points (bps), respectively; (iii) PRC will encourage its financial institutions to make interest concessions as appropriate to businesses to help keep economic fundamentals stable, and ensure that all fee-cutting measures are fully executed on the ground in an effort to ease corporate burdens.
|01C - Forex operations info_outline||
The exchange rate has been allowed to adjust flexibly. A ceiling on cross-border financing under the macroprudential assessment framework was raised by 25% for banks, non-banks and enterprises.
|02 - Credit creation info_outline||CNY3,123,500,000,000||USD445,065,208,267|
|02A - Financial sector lending/funding info_outline||CNY1,410,000,000,000||USD200,909,858,702||
(i) Liquidity injection into the banking system via medium-term lending facility totaling of CNY1 trillion since January of this year ; (ii) June 8, the PBOC, to start buying up to CNY400 billion (US$56.1 billion) of loans that local lenders have provided to small businesses, giving local banks the ability to increase small business lending by as much as CNY1 trillion yuan; (iii) July 30, PBOC conducted a central bank bills swap (CBS) operation on July 30, 2020 in order to improve the liquidity of bank-issued perpetual bonds, support banks to replenish capital through perpetual bond issuance, and enable the financial sector to better serve the real economy. The operation registered RMB5 billion, with a term of three months and a rate of 0.10 percent; (iv) August 27, PBOC conducted a CNY5 billion CBS operation with a term of three months at a rate of 0.10 percent .
|02B - Support policies for long-term lending info_outline||CNY1,713,500,000,000||USD244,155,349,565||
(i) Reduction of the 1-year medium-term lending facility (MLF) rate and targeted MLF rate by 30 and 20 bps, respectively; (ii) Reduction of the interest on excess reserves from 72 to 35 bps; (iii) Flexibility in the implementation of the asset management reform; (iv) The PBOC and the China Banking and Insurance Regulatory Commission (CBIRC) allows the sale of coronavirus-relief bonds by financial institutions. China Development Bank issued the first batch of special bonds to fight the virus, equivalent of CNY13.5 billion at 1.65% for the purpose of emergency funding for affected firms; (v) No amount/estimate: tolerance for higher NPLs for loans by epidemic-hit sectors and SMEs and reduced NPL provision coverage requirements ; (iii) May 15, The PBOC lowered the reserve requirement ration (RRR) by 0.5 percentage points, for rural financial institutions and urban commercial banks operating solely within provincial-level administrative regions. This marks the second phase, of RRR reduction for these types of banks, releasing about RMB200 billion of long-term funds; (iv) June 17, The State Council encouraged financial institutions to provide CNY1.5 trillion (about $212 billion) worth of benefits to firms through cuts in interest rates and other methods this year. In order to support such firms, government at all levels have adopted policies like conducting differentiated supervision, increasing credit availability and mitigating loan risks ; (v) No amount/estimate: PBOC announced the Loan Prime Rate (LPR) on June 22, 2020 as follows: the one-year LPR is 3.85% and the above-five-year LPR is 4.65%. The rates are effective until the next release; (vi) The one-year interest rate charged by the PBOC's lending to financial institutions that take deposits - called the re-lending rate - decreased by 0.25 percentage point to 2.25 percent (aimed especially at increasing cheaper credit for agricultural and small firms). The rediscount rate dropped by the same extent to 2 percent. The bank also lowered the interest rates of re-lending for financial stability purposes by 0.5 percentage point to 1.75 percent.
|02C - Loan guarantees||
No amount/estimate: Increased fiscal support for credit guarantees.
|03 - Direct long-term lending info_outline||CNY350,000,000,000||USD49,871,241,522|
|03A - Long-term lending info_outline||CNY350,000,000,000||USD49,871,241,522||
(i) CNY350 billion for policy banks’ credit extension to micro- and small enterprises. expansion of policy banks’ credit extension line to private and micro- and small enterprises (RMB 350 billion); (ii) In July, the State Council, China’s cabinet, announced it would allow 18 provincial-level governments to use up to CNY200 billion ($28.9 billion) in total from this year’s CNY3.75 trillion quota of special-purpose bonds (SPBs) to inject funds into banks in their jurisdictions that need support. At the time, the government only specified one channel for investment - convertible bonds, which banks can use to replenish their core tier-one capital, the highest-quality capital that a bank has to absorb losses.
|03B - Forbearance||
(i) No amount/estimate: The government has also taken multiple steps to limit tightening in financial conditions, including measured forbearance to provide financial relief to affected households, corporates, and regions facing repayment difficulties including delay of loan payments and other credit support measures for eligible SMEs and households and tolerance for higher NPLs for loans by epidemic-hit sectors and SMEs; (ii) No amount/estimate: June 5, PBOC introduced a policy allowing small and micro businesses to apply for deferring their inclusive loan repayments, maturing by end-2020 to March 31, 2021, with penalty payment exempted by providing 1% of the capital of SMEs’ loan applying for deferring repayments as the incentives for the local small and medium-sized commercial banks who lent those loans. SMEs who benefit from this measure should keep effective guarantee or alternative arrangements, use the loans for production and business purposes, and promise to maintain employment stable .
|04 - Equity support info_outline||CNY200,000,000,000||USD28,497,852,298||
Policymakers are planning to allow local governments to replenish the capital of certain small and midsize banks to the tune of about CNY200 billion ($28.2 billion) in an effort to defuse bad-debt risks.
|05 - Government support to income/revenue||CNY9,868,675,000,000||USD1,406,180,212,646||
(i) CNY1.60 trillion for local governments' infrastructure projects to boost investment amid slowing economic activity and trade headwinds with the United States funded by increase in the ceiling for special local government bonds of 1.3 percent of GDP. The main buyers of such bonds have been state-owned policy banks; (ii) By the end of April, local governments had given out more than CNY6.5 billion worth of consumer vouchers, essentially government subsidised coupons or discounts that can be spent at designated venues, according to data from 42 cities collated by the Chinese Academy of Social Sciences (CASS); (iii) May 28, announced CNY2 trillion in increase in fiscal deficits and issuance of special treasury bonds worth of CNY1 trillion of which CNY300 billion will be used by local governments for COVID-19 prevention and while the rest to support local governments’ operations. The increase of budget deficits and funds raised from the issuance of government bonds for COVID-19 control will all be channeled to primary-level governments. Companies, especially smaller firms, will truly benefit from these funds, and people who live on social security schemes, subsistence allowance, unemployment benefits, old-age support and those living in difficulties will be able to benefit. CNY4 trillion covers payment relief for enterprises of their contributions to social security schemes, and taps into the balance of the unemployment insurance fund, interest concessions made by state-owned commercial banks, and price reductions in natural monopoly industries to lower enterprises’ operating costs. This money will be primarily used to support jobs, people’s basic living needs and businesses, and sustain household income. The government also said expenditure on investment projects will rise by 22.4 billion yuan for 2020. August 27, PRC released fiscal funds of CNY2 trillion that aim to directly benefit businesses and people, and consolidate the foundation of the country's restorative growth. Nearly CNY300 billion of the total funds had been used to support tax and fee cuts by mid August, while CNY1.674 trillion or 98.5 percent of the remaining 1.7 trillion yuan have been allocated by the central government. Local governments have spent CNY509.7 billion, accounting for 30.5 percent of CNY1.674 trillion in funds [update]; (ii) No amount/estimate: June 3, Logistics costs will be further reduced to improve the efficiency of logistics, accelerating the recovery of production and the return to normal life following the COVID-19 epidemic, according to a guideline from the National Development and Reform Commission and the Ministry of Transport ; (iii) June 23, estimated at CNY70O million: China Banking Regulatory Commission issued a "Notice on Hubei Province Insurance Legal Institutions and Branches Exempted from Payment of the 2020 Insurance Security Fund." with this exemption, insurance institutions will be able to provide better risk protection and financial support for the economic and social development of Hubei ; (iv) No amount/estimate: June 9, The Ministry of Human Resources and Social Security proposed to increase vocational skills training efforts to increase the number of free online training and open-line training to areas severely affected by the epidemic and to expand the scope of free courses; (v) No amount/estimate: June 17, Increased the subsidy standard for basic public health services per capita to 74 yuan, for the prevention and control of the new coronary pneumonia epidemic situation, to strengthen the grass-roots epidemic prevention and control; (vi) No amount/estimate: June 24, the State Council announced that government will work to further shorten the time required for starting a business and better regulate the charges on businesses from industry bodies and associations, in an effort to lessen corporate burdens and spur their vitality; (vii) July 13, China's National Development and Reform Commission (NDRC) has allocated CNY45.66 billion to boost the capacity for the prevention, control and treatment of diseases; (viii) July 14, the Ministry of Emergency Management announced an allocation of a total of CNY615 million for disaster relief in regions hit by floods; (ix) No amount/estimate: July 30, PRC decided to hand out financial aid to jobless rural workers and other unemployed groups not covered by unemployment insurance, according to the Ministry of Civil Affairs; (x) No amount/estimate: August 5, The State Council has pledged to bolster China's COVID-19 testing capacity and develop technologies that can produce more accurate results more quickly as the country braces for a possible spike in infections in autumn and winter. Improving testing capacity will be a key measure in coordinating epidemic containment and socioeconomic development; (xii) August 12, State Taxation Administration announced PRC's tax and fee cuts totaled over CNY1.5 trillion. The orderly implementation of China's tax and fee cut policies has helped invigorate market entities and strengthen the sustainability of enterprises' development.
|05A - Health|
|05B - Non-health|
|06 - Budget reallocation info_outline|
|07 - Central bank financing government|
|07A - Direct lending & reserve drawdown|
|07B - Secondary purchase: government securities|
|08 - International Assistance Received||CNY2,796,000,175||USD398,400,000|
|08A - Swaps info_outline|
|08B - International loans/grants||CNY2,796,000,175||USD398,400,000|
|08B1 - Asian Development Bank||CNY304,584,356||USD43,400,000||
(i) February 7, USD1 million of additional financing for Strengthening Regional Health Cooperation in the Greater Mekong Subregion; (ii) February 20, USD18.6 million for the COVID-19 Emergency Response Project; (iii) March 30, USD20 million for the COVID-19 Emergency Energy Supply Project; (iv) April 15, USD3.6 million reallocated from the Chongqing Longxi River Basin Integrated Flood and Enviromental Risk Management Project to finance purchase of ambulances, medical equipment and personal protection equipment, linked to the broadened diaster risk responses capacity of the project components by extending from flood and pollution emergencies to include public health emergencies; (v) June 3, USD.07 million technical assistance on Developing a Disaster Risk Transfer Facility in the Central Asia Regional Economic Cooperation Region; (vi) July 13, USD0.13 million technical assistance on Addressing Health Threats in the Central, West and East Asia Region .
|08B2 - Other||CNY2,491,415,818||USD355,000,000||
April 3, AIIB's USD355 million Emergency Assistance to PRC's Public Health Infrastructure Project .
|09 - International Assistance Provided||CNY14,246,687,636||USD2,030,000,000|
|09A - Swaps info_outline|
|09B - International loans/grants||CNY14,246,687,636||USD2,030,000,000||
(i) USD30 million to support World Health Organization's efforts in combating the global coronavirus pandemic; (ii) President Xi Jinping announced concrete measures to boost global fight against COVID-19 including providing international aid and making the country's COVID-19 vaccine a global public good when available. China will provide $2 billion over two years to help with COVID-19 response and with economic and social development in affected countries, especially developing countries; (iii) No amount/estimate: June 17, within the framework of the Forum on China-Africa Cooperation, PRC annonced that it will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020 .
|10 - No breakdown||
No amount/estimate: August 4, PBOC noting that its policies in the first half of the year facilitated a speedy recovery of the national economy amid COVID-19, the PBOC said it will pursue a more flexible and appropriate monetary policy, making it more targeted, and effectively implement policies aimed at helping enterprises tide over difficulties and ensuring employment in the second half. The central bank also pledged to use a variety of monetary-policy tools to enable M2 money supply and aggregate financing to grow at notably higher rates than last year, while promoting a substantial growth in the inclusive loans to small and micro businesses and medium- and long-term loans to the manufacturing industry. Efforts will be made to leverage a CNY1 trillion ($143 billion) re-lending and rediscount quota and the policy instruments introduced in June to directly channel funds into the real economy and extend support to as many virus-hit micro and small companies as possible .
|11 - Other Economic Measures||
(i) Restrictions on the investment quota of foreign institutional investors (QFII and RQFII) were removed; (ii) No amount/estimate: Additional financing support for corporates via increased bond issuance by corporates; (iii) Announced that it will make regulatory arrangements for the performance commitment requirements and adjustment of restructuring plans for listed companies that are indeed affected by the epidemic . encouraging lending to SMEs, including uncollateralized SME loans from local banks and raising the target for large banks’ lending growth to micro- and small enterprises from 30 percent to 40 percent; (iv) July 13, The State Council, China's cabinet, has decided to implement more reform measures experimented with at the pilot free trade zones (FTZs) across the nation. It is the sixth batch of measures tested by the pilot FTZs before being implemented in other areas. To be replicated nationwide are measures covering five areas: investment management, trade facilitation, financial openness and innovation, operational and post-operational oversight, and human resources; (v) July 14, The government encourages the private sector to fund transportation infrastructure, and no restrictive threshold shall be set for private investment in this aspect ; (vi) Juy 10, PRC will allow foreign banks to gain access to fund custody business in its market, as part of efforts to further open up the financial sector. Eligible Chinese branches of foreign banks will be able to apply for permits for fund custody business, according to the newly-revised fund custody rules jointly issued by the China Securities Regulatory Commission and the China Banking and Insurance Regulatory Commission; (vii) July 17, The new regulation on ensuring timely payments to small and medium-sized enterprises, which will go into effect on September 1, which will safeguard the legitimate rights and interests of SMEs, reduce their operational costs and optimize the business environment; (viii) July 28, The State Council has adopted a package of measures to facilitate investment and widen market access to improve the business environment and help counter the economic impact of the COVID-19 pandemic. Key policies include the removal of unreasonable market access barriers in the construction, education, healthcare and sports sectors, improving the efficiency of customs clearance and encouraging the growth of new business models ; (ix) July 28, A new regulation on ensuring timely payments to small and medium-sized enterprises, which will go into effect on Sept 1, will better safeguard legal rights and interests of SMEs and private enterprises that are now having a hard time due to the COVID-19 pandemic and create a fairer business environment, said industry insiders .
|12 - Non-Economic Measures||
The government imposed strict containment measures, including the extension of the national Lunar New Year holiday (ending on Feb 2 extended from Jan 30), the lockdown of Hubei province, large-scale mobility restrictions at the national level, social distancing, and a 14-day quarantine period for returning migrant workers. The domestic transmission of the virus has slowed significantly, and mobility restrictions have been largely removed, while policy has tightened to contain the virus transmission of asymptomatic cases. Starting in mid-February, the government has gradually removed mobility and activity restrictions, prioritizing essential sectors, specific industries, regions, and population groups based on ongoing risk assessments. Most businesses and schools have reopened nationwide, but social distancing rules remain in place at the micro level and foreign entry remains restricted to contain imported cases. Localized movement restrictions were re-imposed in new hotspots, including in the northeastern Jilin and Heilongjiang province, and more recently in Beijing, Xinjiang, and Dalian. As of August 27, all these regions (except certain areas in Xinjiang) have lowered their emergency response level to Level III (low risk). Testing and individualized health QR codes are used to gauge the path of the virus and contain outbreaks. With normalizing economic activity, real GDP growth rebounded by 3.2 percent (yoy) in Q2.