Huang Qifan Suggests Working on Weekends and Holidays, Printing Money and Tax Breaks for SMEs

Update: The new headline highlights his call for 1 trillion in SME breaks and stimulus for virus-stricken areas. 黄奇帆：提请全国人大审议通过增发1万亿特别国债 支持中小企业

The tourism industry is probably not a fan of the "cancel weekends and holidays" aspect of this plan.

iFeng: 黄奇帆：新冠肺炎疫情下对经济发展和制造业复工的几点建议

With the resumption of work in all parts of the country on February 10, the prevention and control of the new crown pneumonia epidemic has entered a brand new stage. General Secretary Xi Jinping personally deployed and personally commanded, and the country has formed a situation of comprehensive mobilization, comprehensive deployment, and comprehensive strengthening of epidemic prevention and control. At the same time as further prevention and control of infection, the epidemic stagnation war has also begun to enter the stage of orderly restoration of production.

It currently appears that the negative impact of the epidemic on the economy will be much greater than that of SARS. The impact of SARS on the economy in 2003 was mainly concentrated in the second quarter, with a growth rate of 1.5 percentage points lower than that of the previous two quarters. Passenger transportation, tourism, accommodation, catering, and retail industries were greatly affected in the short term, and investment and foreign trade were affected. Not obvious; affected by the dual benefits of demographic dividend and WTO accession, the emergence of "SARS" did not interrupt the rising trend of the economy at that time. However, the epidemic situation is different. The scope of the epidemic is far beyond “SARS” and covers almost all economically active and developed provinces and cities in China. In terms of duration, the “new crown” with Wuhan as its core is likely to be longer than the SARS with Guangzhou as its core.

Impact of the epidemic on China's economic development and manufacturing

At present, China's economic growth is in a critical period of declining growth and difficult transition. The epidemic will lead to pressure on consumption, sluggish investment, and worsened fiscal revenue. After the epidemic, with the closure of Wuhan and the launch of a first-level response mechanism for major public health emergencies across the country, the "Spring Festival Golden Week", which was expected to exceed 450 million tourists, has become the "National Epidemic Prevention Week". Consumption in hotels, cinemas, etc. has plummeted, and a large number of SMEs have been under heavy pressure.

At present, the contribution of China's tourism industry to GDP has reached about 11%, and the number of direct and indirect employees exceeds 100 million. If it is severely hit this time, on the one hand, it will drag down overall employment, putting great pressure on the employment situation and social stability of the whole society; on the other hand, it will also help the "quality-oriented consumption" that has been nurtured by supply-side reforms in recent years, which will help promote high-quality consumption. "High-quality supply" brought shocks. Once the epidemic passed, these supplies could not keep up, and it was not conducive to restarting the economic cycle.

Under the influence of these internal and external factors, if no stable control measures are taken, a large number of small and medium-sized manufacturing enterprises will experience operational difficulties. More importantly, the industrial ecology of some fragile manufacturing industries is likely to be destroyed, leading to more Long-term negative effects. The disruption caused by the disruption of logistics and disease control measures caused by the disruption of the industrial chain and supply chain is much greater than the Sino-U.S. Trade friction. Once the disruption occurs, transfer substitution is formed, and the manufacturing foundation of some industries has been lost for 30 years, which is difficult. Find it again. Therefore, we must attach great importance to the protection of the industrial ecology, the protection of the industrial chain and the supply chain, and the protection of small and medium-sized enterprises just as we attach importance to the epidemic itself. Only in this way can we truly survive the crisis.

Take comprehensive measures to stabilize the fundamentals of China's economic growth

Although the epidemic will not change the fundamentals of China's long-term positive economy, the short-term impact on the manufacturing industry, the majority of small and medium-sized enterprises, and the overall level of economic transaction activities cannot be ignored. Comprehensive measures should be taken to stabilize the fundamentals of economic growth. The annual economic growth rate will be stabilized at about 5%.

The first is to keep the logistics flowing while managing the flow of people (concentrated isolation of all diagnosed, suspected, and close contacts). At present, in order to effectively prevent and control the spread of epidemics, some places have adopted some strict measures, but be careful not to go to extremes, cannot easily cut off roads, sail, or even "close the city", affecting the national economic artery of logistics. The entire industrial manufacturing industry, including steel, chemical, power, equipment manufacturing, and light industry electronics, sales of raw materials, components and products, if stopped because of logistics failure, will not only cause huge losses, but also bring catastrophic damage to the entire upstream and downstream influences.

The second is to adopt a more active fiscal policy. Due to special circumstances this year, the conventional limit of fiscal deficits not exceeding 3% of GDP can be exceeded. The National People's Congress is requested to consider and issue 1 trillion additional special government bonds to support SMEs in reducing taxes and fees and transferring payments to epidemic-stricken areas.

The third is to adopt a monetary policy adapted to fiscal expansion. The central bank stepped up its efforts to purchase government bonds and further reduced the RRR and interest rates after the epidemic eased in the second quarter.

Fourth, supplementary work will be implemented for the holidays extended due to the prevention and control of the epidemic. In order to make up for the loss of the enterprise, it is recommended to allow the company to implement appropriate supplementary work for the extended holiday according to its own conditions, and employees can choose to perform supplementary work on weekends or other holidays within one year. In some places, supplementary work has been extended for a number of working days on the basis of the State Council's decision to extend holidays.

The fifth is to mobilize various regions and departments to introduce measures to relieve SMEs in light of local conditions. Implement comprehensive tax and fee reductions for SMEs; appropriately extend the SME loan due to the suspension of the epidemic and fail to repay it; continue to carry out risk investigation and disposal of equity pledge of major shareholders of listed companies, and characterize the epidemic as External factors of force majeure cushion the risk of forced liquidation caused by the stock market decline.