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The Shanghai city government plans to cut loan rates and take other measures to help companies and maintain growth as the spread of the novel coronavirus takes its toll on China’s economy.
The city wants financial institutions to increase lending to industries, and small and medium-sized firms hit by the epidemic, Ma Chunlei, deputy secretary general of the municipal government, said at a briefing in Shanghai. He called for loan rate cuts of at least 0.25 percentage points off benchmark prime for the duration of the virus. Other measures could include extended repayment periods, rent reductions and deferment of tax payments, Ma said.
Companies are facing tightened cash flows and higher costs because of the disrupting effects of the virus. The planned measures are expected to reduce corporate costs by more than 30 billion yuan ($4.3 billion).
Nationwide, China is offering a comprehensive package of tax and fiscal measures to help domestic businesses hurt by the coronavirus outbreak. The transportation sector will be a key beneficiary from measures including temporary -added tax breaks and loss carry-over extensions. Agriculture and retail companies will also benefit in some provinces.
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