China further extends loan repayment for small firms hit by COVID

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Paramilitary police officers stand guard in front of the headquarters of PBOC in Beijing

BEIJING (Reuters) -China will extend loan repayment dates for small firms hit by COVID-19 and encourage financing institutions with government guarantees to continue offering credit support to those firms, according to a notice published by the central bank on Monday.

The move came when small businesses, the mainstay of China’s economy and a major source of jobs, were disrupted this year by stringent coronavirus lockdowns and curbs across the country.

For COVID-hit small firms, loan repayments due in the fourth quarter in 2022 can be extended to June 30, 2023, said the notice jointly released by multiple departments including the People’s Bank of China (PBOC), the finance ministry and the country’s top economic planner.

The PBOC vowed to keep liquidity “reasonably” ample and urged financial regulators to implement differentiated policies to small and micro enterprises, such as tolerance differentiation of their non-performing loans, according to the notice.

Amid protracted COVID curbs and a property slump, signs of weakness are emerging across the economy as exports fell and new bank lending tumbled.

Beijing and several other major cities reported record COVID-19 infections on Monday, heaping more pressure on authorities to quell outbreaks quickly while also trying to reduce the impact on people’s lives and on economic activity.

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China is due to release October activity data on Tuesday with analysts expecting slower growth for industrial output and retail sales compared with September.

(Reporting by Ellen Zhang and Ryan Woo; Editing by Toby Chopra and Emelia Sithole-Matarise)

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