Tue | Apr 7, 2020

China promises companies aid, global virus cases rise

Published:Tuesday | February 25, 2020 | 12:18 AM
In this Sunday, February 23, 2020 photo, workers take a rest near the closed restaurant and bank in Wuhan in central China’s Hubei province.
In this Sunday, February 23, 2020 photo, workers take a rest near the closed restaurant and bank in Wuhan in central China’s Hubei province.

The Government of China promised tax cuts and other aid Monday to help companies recover from its virus outbreak, while a spike in new cases in Iran, Italy and South Korea raised the prospect of wider disruption to tourism and other global industries.

At a news conference, Chinese finance and planning officials expressed confidence the ruling Communist Party’s growth targets can be achieved this year, despite anti-disease controls that shut down much of the world’s second-largest economy last month.

President Xi Jinping publicly promised over the past week to ensure farming and other industries recover quickly. Still, forecasters say it is likely to be at least mid-March before automakers and other companies return to full production.

The government is looking at “targeted tax reduction,” interest rate cuts and payments to poor and virus-hit areas, said an assistant finance minister, Ou Wenhan.

“We will do a good job of implementing large-scale interest rate reduction and tax deferral, and ensure effective implementation as soon as possible,” said Ou.

Business activity plunged after the Lunar New Year holiday was extended to keep factories and offices closed and the government told the public not to travel. Automakers and other businesses are gradually reopening, but officials also have orders to prevent infection from spreading as millions of people return to work.

Elsewhere, a surge in reports of new cases raised the prospect of more disruptions.

Austria halted rail traffic across its border with Italy after the country reported four deaths and 190 cases. Authorities have yet to pinpoint the source of infection.

In Iran, the ILNA news agency quoted an official in the city of Qom – a popular place of religious study for Shiites from across Iran and other countries – as saying 50 people have died there from the virus there since February 13.

Also Monday, South Korea reported 70 new cases, raising its total to 833, and two more deaths, for a total of seven.

South Korea’s government has closed schools, cancelled public events and asked companies to stagger work hours.

ING said in a report Monday that Asian economies could lose US$105 billion to US$115 billion this year in potential sales to Chinese tourists.

In China, Xi said Sunday that regions deemed to be at low risk should ease disease curbs to revive business activity, while high-risk regions should focus on epidemic control. The president said officials should make sure planting of spring crops in China’s vast countryside is not disrupted.

Nearly 1,000 companies have received low-interest loans from a 300-billion yuan (US$43-billion) recovery fund offered by the central bank, according to a People’s Bank of China official, Chen Yulu.