China to step up financial support in Wuhan coronavirus fight: Central bank

Asia Business World

BEIJING: China will step up monetary and credit support to enterprises helping its fight against the deadly new coronavirus, the central bank said Saturday (Feb 1), as the disease threatens to further dent a slowing economy.

The government will provide support to key enterprises, urging financial institutions to provide “sufficient credit resources” to hospitals and other medical organisations, the People’s Bank of China (PBOC) said in a statement.

This is to help with their financial needs in areas ranging from buying medical supplies to building public health infrastructure.

The PBOC added it will “maintain reasonable and sufficient liquidity”, using policy tools such as open market operations to release sufficient liquidity into the financial market.

READ: Chinese official says slow response made virus epidemic worse

Misinformation about the mystery virus has spread widely since its outbreak in China
Misinformation about the virus has spread widely since its outbreak in China. (Photo: AFP/Nicolas Asfouri)

It added there should be differentiated financial services provided to regions and industries hit by the virus epidemic.

It called on financial institutions to avoid “blindly” cutting off loans from industries such as wholesale and retail, as well as small and micro enterprises.

Key sectors such as manufacturing will also see better credit support, it added.

“Financial institutions should … continue to increase support for small and micro enterprises, as well as private enterprises,” said the PBOC.

The central bank will also tap lower lending rates, an increase of credit loans, as well as medium- and long-term loans to help enterprises overcome the impact of the epidemic.

Financial institutions should also allow flexible repayment where needed, on credit loans for those who temporarily lose their income sources due to the epidemic.

READ: China slams US for travel warning over virus

Shanghai residents have their temperature taken before entering their apartments
Shanghai residents having their temperature taken before entering their apartments.

The SARS-like virus that spread from the central Chinese city of Wuhan – in Hubei province – has killed more than 250 people and infected nearly 12,000 across the country.

With cities in Hubei on lockdown and travel restrictions on Chinese citizens around the world, analysts are expecting economic growth to take a hit.

Some believe a prolonged outbreak could see full-year growth coming in at 5 per cent or below.

China’s economy grew at 6.1 per cent for 2019, the slowest in around three decades.

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