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China to offer financial help to firms that keep staff on payrolls

This article is more than 12 months old

BEIJING: China's State Council, the Cabinet,yesterday said the government will offer financial help to struggling companies that keep staff on payrolls in a time of increasing economic headwinds.

For companies that 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 on its website.

The government also urged the country to pay "high attention" to the impact on employment from increasing economic downward pressure.

Beijing will provide subsidies to out-of-job workers who are undergoing job training, the State Council added.

Last month, China flagged that it would take"targeted" steps to promote employment, but it did not specify the measures would be tied to job retention.

Facing cooling economic growth, officials have pledged to reduce companies' tax burdens in various ways, including cuts in social security contributions, to support business growth, profitability and employment.

Factory surveys have pointed to a prolonged period of job cutting in manufacturing, and Beijing is keen to keep employment stable as the trade war with the US has meant uncertainty for factory workers' job prospects.

The newly created national guarantee fund will offer guarantee for small businesses when it comes to securing bank loans, the government said, in a bid to guide more financial resources to support job creation.

China's economic growth "could well fall towards 6 per cent (if not lower) in 1Q 2019", economists at DBS Bank said in a note to clients, adding that China will most likely counter this growth trajectory with further stimulus moves. - REUTERS

BUSINESS & FINANCE