BEIJING -China’s state planner on Friday issued rules to promote a faster recovery from the COVID-19 pandemic in the services sector, including providing tax incentives to the catering, retail, tourism and aviation industries.
The National Development and Reform Commission also said it would guide online food delivery platforms to lower operating costs for catering businesses by reducing service fees, or commissions. The announcement sent shares in Meituan, one of the industry’s dominant players, down by over 10%.
China’s vast services sector, which has been slow to recover from the COVID pandemic, is more vulnerable to sporadic outbreaks in the country, especially at a time when China is sticking to a zero-COVID approach of quickly stamping out virus clusters regardless of the economic cost.
The government urged greater financing support from local governments to retail firms for having routine and free COVID-19 tests for their staff, and will support banks to reasonably step up credit supply to the tourism industry, the NDRC said.
China will also stop collecting value-added tax from airlines for 2022 and keep subsidizing key routes and small airports, according to NDRC.
It also said it would encourage internet platforms to give preferential service fees to catering companies in pandemic affected areas. Meituan and Alibaba, who owns food delivery platform Ele.me, did not immediately respond to requests for comment.
(Reporting by Stella Qiu, Yingzhi Yang and Brenda GohEditing by Shri Navaratnam, Sam Holmes and Lincoln Feast.)
