Service sector

China introduces support measures for struggling service sector

Chinese regulators on Friday introduced measures to support the country’s service sector, a persistent lag in its pandemic recovery, as the economy faces renewed downward pressure.

Led by the country’s state planner, the authorities have rolled out a series of measures, including tax breaks and additional financial support for struggling companies in the service sector.

China will pursue a policy of deducting value-added tax from service providers in 2022, according to a document released by the National Development and Reform Commission.

In addition, four tax breaks and two fee reductions, which micro-enterprises were eligible for in the past two years, will be extended to all service providers this year, according to the NDRC.

Small service companies that rent properties from public landlords and operate in medium and high risk regions may be exempt from paying six months’ rent this year. Those operating in low-risk regions are eligible for rent waivers for three months.

Amid recurring Covid-19 outbreaks in different regions and strict government-imposed restrictions, China’s service industry has been repeatedly hit by new outbreaks. Industries such as catering and tourism that require close contact have barely recovered to pre-pandemic levels.

In Friday’s document, the state planner called on local governments to provide grants to cover at least 50% of expenses for Covid testing by restaurant and retail businesses, as required by policy. chinese zero-Covid.

Authorities have also called on online food delivery platforms to slash prices for struggling catering businesses, while pledging state-dominated financial institutions to expand support for catering and other businesses. troubled services.

The government has also urged localities to refrain from unnecessary lockdowns and other virus prevention measures, and implement precise targeted Covid prevention measures. A massive lockdown and suspension of public transport services will require the approval of central authorities, the NDRC said.

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