From the end of January, the Chinese authorities have multiplied their economic stimulus initiatives in order to mitigate the devastating effects of the Covid-19 crisis on the country's overall economy, and first and foremost on Hubei, that saw its capital Wuhan be the epicenter of the virulent disease. Hubei Province is China’s 7th richest and accounts for 80% of all of the nation’s coronavirus cases and 95% of its Covid-19 deaths. The stimulus provisions are initially aimed at rescuing businesses and avoiding bankruptcies and sudden closures. After the health crisis peak in mid-February, priority was given to reopening businesses and thus boosting the economy in order to ensure stable employment. In a comprehensive report published at the beginning of April assessing the consequences of the epidemic on Chinese companies, the United Nations Development Programme (UNDP) reviews the measures adopted along with their intended and actual impacts.
In terms of financial support, credit institutions were urged to provide preferential loans, approve extensions of existing loans and lower interest rates on certain loans for SMEs. SMEs saw VAT rates lowered or even in some cases removed, as in Hubei. Flexibility at work has been encouraged and companies have seen their social security charges greatly reduced or even eliminated for the period between February and June.
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