Economic "anti-epidemic" policies are on the way, and experts believe that fiscal policy can be more effective

The economy’s “fight against the epidemic” has reached a critical moment.

Recently, economists have offered suggestions on how to deal with the impact of the epidemic on people's livelihood.

Among them, Huang Qifan, chairman of the Tsinghua Industrial Transformation Advisory Committee, wrote an article talking about the impact of the epidemic on China's economic development and manufacturing industry, proposing to cancel the corporate housing provident fund system, which aroused widespread discussion in the market.

The proposal to cancel the provident fund has triggered heated discussions

Recently, Huang Qifan stated in the article "Some Suggestions for Economic Development and Resumption of Manufacturing under the New Crown Epidemic" that the housing provident fund system was established in the 1990s. I first learned this from Singapore. Now that my country's real estate has long been marketized, commercial banks have become the main body in providing housing loans. The existence of the housing provident fund has little significance. Its elimination can directly reduce the cost of 12% for enterprises and employees.

Huang Qifan also proposed in the article that relevant policies should be implemented as soon as possible for migrant workers to settle in cities, quickly solve the problem of labor shortage in the manufacturing industry, introduce policies to encourage enterprises to implement annuity systems, and unblock the corporate annuity investment capital market. Channels and mechanisms, finding ways to reduce logistics costs and other suggestions.

Image source: Tsinghua University Internet Industry Research Institute

In fact, there have been suggestions for abolishing the compulsory provident fund payment system for a long time.

Yang Weimin, deputy director of the Economic Committee of the National Committee of the Chinese People's Political Consultative Conference, called on many occasions at the 2018 Lujiazui Forum to gradually cancel the compulsory housing provident fund, gradually change the compulsory housing provident fund to voluntary deposits, and establish a policy housing financial institution. reform.

However, there has been ongoing controversy over whether to abolish the compulsory provident fund payment system.

Yin Zhongli, director of the Real Estate Finance Research Center of the Institute of Finance, Chinese Academy of Social Sciences, said in an interview with a reporter from the China Securities Journal that the housing provident fund system is the most important component of China’s policy-based housing finance system and plays an important role in China’s policy-based housing finance system. The reform of the housing system plays a very important role in promoting. It has played an irreplaceable role in helping working-class people, especially young people, complete home purchases and reduce home purchase costs. If we talk about policy-based housing financial support in China, the only channel is the housing provident fund, which is an indispensable component of policy-based housing finance.

Yin Zhongli said that for companies that are really in difficulty, they can adopt a policy of suspending or even temporarily exempting provident fund payments, or appropriately reduce the overall provident fund payment ratio.

"This article is written from the perspective of several suggestions for economic development and manufacturing resumption under the new crown epidemic, so it objectively focuses on the consideration of enterprise cost reduction. It mentions the reduction of enterprise costs, which has It has a more positive meaning. In May 2018, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance, and the Central Bank issued the "Notice on Improving the Housing Provident Fund Payment Mechanism to Further Reduce Enterprise Costs". On the basis of the original reduction of the payment ratio, each enterprise has relevant The policy is extended to April 2020. Therefore, from the perspective of reducing enterprise costs, it will also have a positive effect to study the content of reducing or canceling provident fund deposits. Of course, direct cancellation must be fully demonstrated. It cannot be ruled out that after April this year, the state will The existing policy of enterprises lowering the housing provident fund payment ratio will be extended for 1-2 years," Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, told China Securities Journal.

Economic "anti-epidemic" related policies are on the way

The Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China held on February 12 pointed out that it is necessary to increase macroeconomic policy adjustments and target We will study the impact of the epidemic and formulate corresponding policies and measures. It is necessary to better leverage the role of proactive fiscal policies, increase capital investment, and ensure the funding needs for epidemic prevention and control in various regions. It is necessary to continue to study and introduce phased and targeted tax and fee reduction measures to ease the operating difficulties of enterprises. It is necessary to maintain a prudent monetary policy that is flexible and appropriate, increase credit support at preferential interest rates for enterprises producing anti-epidemic materials, and improve differentiated preferential financial services for regions, industries and enterprises that are greatly affected by the epidemic. It is necessary to implement employment priority policies with greater intensity and improve fiscal, taxation, financial, social security and other policies to support small, medium and micro enterprises.

The meeting pointed out that it is necessary to actively expand domestic demand and stabilize external demand.

It is necessary to focus on key areas, optimize the investment direction of local government special bonds, make good use of investment within the central budget, mobilize the enthusiasm of private investment, and accelerate the construction of a number of major projects. It is necessary to promote the improvement and expansion of service consumption, expand the consumption of physical goods, and accelerate the release of emerging consumption potential. It is necessary to support foreign trade enterprises in resuming production, increase trade financing support, and give full play to the role of export credit insurance. We must actively participate in international coordination and cooperation to create a good international environment for the development of foreign trade. It is necessary to promote the implementation of large foreign-invested projects, implement the foreign investment law and supporting regulations, optimize the foreign investment environment, and protect the legitimate rights and interests of foreign investors.

As for the various economic "anti-epidemic" policies that will be introduced and have been introduced, the chief economists of securities companies interviewed by reporters from China Securities News generally believe that compared with monetary policy, fiscal policy is more effective. Be more targeted and achieve better results.

Peng Wensheng, deputy director of the Everbright Group Research Institute and chief economist of Everbright Securities, said that in terms of macro policies, the impact of the epidemic on the economy is a short-term phenomenon and an important judgment. This means that the policy response should be more targeted support to help severely affected industries, regions and groups, rather than a flood of water. In other words, macroeconomic policies should focus on structure rather than total volume. Although monetary policy may be looser than before the epidemic, the main force should be fiscal expansion, including revenue reduction and expenditure increase.

Hua Changchun, the global chief economist of Guotai Junan Research Institute, said in a recent interview with a reporter from China Securities Journal that in terms of fiscal policy, it is recommended to issue special government bonds. The fiscal deficit ratio can be significantly increased, and a deficit ratio of 3.5 during special periods is acceptable and reasonable. Increase tax exemptions for the most affected industries, such as reducing corporate income tax, value-added tax, government funds, etc., increase the scope and intensity of pre-tax deductions for them in the first quarter, and even reduce labor costs, Certain financial subsidies will be provided for rental costs, etc.

At the same time, local government fiscal revenue will inevitably be affected. At this time, government financing tools should be appropriately broadened. For example, it can help local governments issue REITS products to revitalize existing operating infrastructure assets.