Social insurance premiums to be deferred to support stable payrolls, provide training

China will adopt the policy of postponing payments of old-age insurance premiums for a limited time for industries experiencing special difficulty, and it will channel more unemployment insurance funds to support enterprises in maintaining stable payrolls and providing training, according to a decision made at the State Council's executive meeting chaired by Premier Li Keqiang on Wednesday.

The meeting noted that major economic indicators are generally within an appropriate range, yet the domestic and external environments face growing complexities and uncertainties, some of which are unexpected.

Li urged efforts to better coordinate the COVID-19 response with economic and social development. The decisions of the Central Economic Work Conference and the policy steps laid out in the Government Work Report should be swiftly implemented, and some of the policies may be front-loaded as needed.

With businesses severely affected, and some even halting production or temporarily closed, greater efforts must be made to provide relief to struggling enterprises and meet the basic goal for employment.

"The most pressing challenge facing industries in special difficulty is from payments of social insurance premiums," Li said. "What the government can do is to have these payments deferred for now, and adjust and adapt the policy as the situation evolves."

For the catering, retail, tourism, civil aviation, highway, waterway and railway transportation industries, the policy to defer payments of old-age insurance premiums will be implemented during the second quarter of this year.

The policy of expanding the scope of unemployment insurance benefits will remain effective for a limited time.

By the end of this year, all urban and rural unemployed people who are in the program will continue to receive unemployment subsidies, and all unemployed migrant workers in the program will receive provisional living allowances.

The proportion of refunding unemployment insurance premiums for small businesses that make no cuts or minimal cuts to staff numbers will be increased, from 60 percent to as high as 90 percent for eligible localities.

In addition, localities will be allowed to take 4 percent from the balance of the employment insurance funds to support vocational training programs.

The meeting also required the agile and appropriate use of monetary policy tools, and better leveraging of their role in adjusting both the monetary aggregate and the monetary structure, in order to provide robust support to the real economy.

Relending for agricultural and small enterprises will be increased, and instruments to support inclusive loans to micro and small businesses will be harnessed.

"Over the past years, we refrained from flooding the economy with mass stimulus. We must explore every possible means to anchor expectations and boost consumption and investment. This cannot be done in the absence of financial support. More market-based approaches should be employed," Li said.

Policies on providing financial support for consumption and effective investment will be explored. Financial services for new urban residents will be enhanced, and those for government-subsidized housing improved. Financing needs of key projects will be met as a matter of priority. Efforts will be made toward a fairly rapid increase in medium- and long-term loans to manufacturers.