(Translated by https://www.hiragana.jp/)
Explainer | What stimulus measures did China use to combat the economic impact of the coronavirus? | South China Morning Post
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Coronavirus pandemic
EconomyChina Economy

Explainer | What stimulus measures did China use to combat the economic impact of the coronavirus?

  • Faced with the unprecedented economic impact of the coronavirus outbreak, China rolled out numerous measures to aid the world’s second largest economy
  • In response to the global financial crisis in 2008, China implemented a massive 4 trillion yuan (US$564 billion) stimulus package

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With the coronavirus posing a greater threat to the economy, the outbreak left the top leadership with a decision to make, as the efforts in 2008 left the nation with a mountain of debt. Photo: Bloomberg
Frank Tang

In response to the global financial crisis in 2008, China rolled out a massive 4 trillion yuan (US$564 billion) stimulus package.

When the coronavirus posed an even greater threat to the economy in 2020, the outbreak left the top leadership with a decision to make, as the efforts in 2008 also left the nation with a mountain of debt.

Before the outbreak, China had already cut the top tier of the value-added tax (VAT) rate to 13 per cent from 16 per cent in April 2019, after a one percentage point cut in 2018. It had also raised the personal income tax threshold by 1,500 yuan (US$211) to 5,000 yuan (US$705) in January 2019, while allowing more pre-tax deduction in terms of child care, elderly care, medical expenditure, mortgage interest rates and continued learning. The total tax cuts amounted to 2.3 trillion yuan (US$324 billion) in 2019.

These moves were largely in response to the trade war with the United States, which led China’s economy in 2019 to slow to a growth rate of 6.1 per cent, the slowest rate since political turmoil ravaged the country in 1990.
Here, we track China’s response to the coronavirus outbreak, which emerged just as those trade war tensions with the US appeared to have cooled with the signing of the phase one deal in January.

September 2, 2020 - China’s cabinet approves two new nuclear power plants 

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