March 20, 2020 / 11:27 AM / in 15 days

China unveils more steps to support jobs as virus jolts economy

BEIJING (Reuters) - China’s cabinet announced more measures on Friday to support employment in the world’s second-largest economy, which is expected to shrink for the first time in four decades because of the coronavirus outbreak.

FILE PHOTO: Employees wearing face masks work on a car seat assembly line at Yanfeng Adient factory in Shanghai, China, as the country is hit by an outbreak of a new coronavirus, February 24, 2020. REUTERS/Aly Song/File Photo

China’s jobless rate rose to a record 6.2% in February and any rapid rise in unemployment could pose a big challenge to China’s stability-obsessed leaders.

China will speed up targeted tax cuts for firms, return more unemployment insurance premiums to companies that save jobs and subsidise small firms to hire college graduates with contracts longer than a year, the cabinet said in a statement on Friday.

The government will also accelerate the resumption of operations at key firms and projects, especially in manufacturing, construction, logistics and public services, the cabinet said.

Small- and medium-sized firms with few or zero layoffs, could get back up to 100% of the unemployment insurance premiums paid in the previous year, the cabinet said.

China will also help migrant workers to find jobs and support flexible employment, allow more street vendors and markets, stalls and other business outlets, it said.

Premier Li Keqiang said China would spare no effort to help small, medium-sized and private businesses to survive, adding that fiscal and monetary policies that have been rolled out should be aimed more towards small companies, according to a statement posted on the cabinet’s website.

Small and private firms in China account for 80% of urban employment.

“The current epidemic situation is spreading globally and the international market is very volatile”, the official Xinhua news agency quoted Li as saying.

The premier said China’s macroeconomic policy coordination should track changes in the world economic situation, and study and improve countermeasures in a timely manner to boost the economy’s recovery, according to Xinhua.

Reporting by Lusha Zhang, Roxanne Liu and Kevin Yao; Editing by Kevin Liffey and David Clarke

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