The finance ministry of China said on Sunday that all levels of government had allocated over 70 billion yuan or S$14.3 billion in total to fight coronavirus. In addition, new corporate bonds can be an option for firms affected by the outbreak.
The ministry will deploy the funds to ensure that members of the public can afford diagnosis and treatment, it said in a statement on its website. This is to ensure that efforts of every region to fight the virus are not hampered by financial constraints, it added.
Chinese firms that are seeking to raise funds for projects such as medical services and scientific research related to the virus will also be supported, said the National Development and Reform Commission (NDRC) in a statement on Saturday. The income requirements for bonds on such projects can be relaxed if safeguards for debt repayment are in place.
New Corporate Bonds
Firms affected by the disease but with quality assets and good operations of virus-related projects will be allowed to apply for the issuance of new corporate bonds to repay the principal and interest of debt due in 2020.
NDRC will encourage firms with good credit to provide liquidity support for small and medium-sized enterprises (SMEs) affected by the outbreak. It will also allow the extension of time limits for bond issuance and the submission of application materials for some companies.
Shanghai City's Plan
In Shanghai, its city government plans to trim loan rates and take other measures to help companies and maintain growth as the virus outbreak dents China's economy. Ma Chunlei, deputy secretary-general of the municipal government urges financial institutions to increase lending to industries, and small and medium-sized firms affected by the epidemic in a briefing in Shanghai over the weekend.
He called for loan rate cuts of at least 0.25 percentage points off benchmark prime for the duration of the virus, amongst other measures that include extended repayment periods, rent reductions and deferment of tax payments.
