Friday, July 10, 2020
Martin Hennecke

China acts to protect job market
Shenzhen will boost the development of private firms by reducing costs, providing additional bank credit and loans, and setting up a 100 billion yuan (HK$113.92 billion) "stable development" fund, a paper released by the local government said. The measures include using the 10 billion yuan equity fund and 5 billion debt fund to mitigate risks regarding Shenzhen-listed companies' pledged share financing. Meanwhile, China's state council said the government will offer financial help to struggling companies who keep staff on payrolls at a time of increasing economic headwinds. For firms who choose not to cut staff or reduce the number of job cuts they are planning next year, the government will return half of their unemployment insurance fees, the state council said in a statement. Hong Kong Stock Exchange's chief China economist Ba Shuzong said financial institutions in the Greater Bay Area have room for improvement. JP Morgan Chase & Co expected China's gross domestic product growth would be between 6 to 6.5 percent next year. "We don't need to be too pessimistic since the government has enough room for both monetary and fiscal policy adjustments," senior China economist Liao Wei said. She added if there is a long-term trade truce, China may continue the reform on deleveraging, while it may cut the required reserve ratio twice next year if the trade dispute escalates, and the policies are highly dependent on domestic economy and trade negotiations.
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