BEIJING (Reuters) – Financial institutions in China including banks and insurers should do more to help struggling offline retail, accommodation, catering and trading firms in the wake of recent domestic coronavirus outbreaks, the commerce ministry said on Thursday.
The Chinese economy has largely rebounded to pre-pandemic growth levels, but the recovery has been uneven and the expansion is losing steam as businesses grapple with sporadic COVID-19 outbreaks, supply bottlenecks and higher raw material costs.
Offline retailers, hotels and restaurants have been particularly hit hard by COVID-19 outbreaks, with local governments quick to roll out social-distancing rules under Beijing’s zero-tolerance policy on the coronavirus.
The government is supportive of financial institutions stepping up financing, including studying a fund-raising tool aimed at small firms and using the proceeds of special bond issurances to help small companies, the ministry said.
Banks are urged not to cut credit lines or withhold loans to those firms, it added.
For exporters coping with high raw material prices, surging logistics costs and currency fluctuations, insurers should step up insurance for export orders that may be cancelled before shipment, the Commerce Ministry said.
The ministry also supports foreign invested and trading firms in conducting cross-border transactions in yuan, it said, adding that banks should explore the idea of lowering hedging costs for small firms.
China’s export growth unexpectedly slowed in July, following the outbreak of COVID-19 cases, largely driven by the more infectious Delta strain. Disruptions caused by recent extreme weather also hampered economic activity.
Reporting by Stella Qiu, Cheng Leng and Ryan Woo; editing by Philippa Fletcher