China's State Council promoted efforts to clear government departments and state-owned enterprises' arrears to private firms and small and medium-sized enterprises (SMEs) operating in China on Wednesday. The Council decided that it is necessary to maintain market and economic order.
According to a report by Xinhua, China's State Council wants to improve the business environment in the country by first settling its arrears with private firms and small and medium-sized enterprises (SMEs) operating in China.
They also wanted to maintain market and economic order on top of marketing expectations and government credibility. The statement also shared that the executive meeting chaired by Premier Li Keqiang was conducted to help China alleviate its economic problems by promoting a good business environment.
It was revealed that China settled more than 890 billion Chinese Yuan or 128 billion USD worth of arrears owed by government department and state-owned enterprises in 2019. The payment to SMEs and private firms amounted to 75 percent of the country's arrears.
The payment was also referred to as a substantial amount that covered half of the payments for lodged for this year. Furthermore, the council members agreed that all national debts would be, as much as possible, cleared by the end of 2020 on those owed during 2019.
The State Council also urged state-owned enterprises to establish timely repayment plans to SMEs and private firms. The meeting even discussed China's cabinet's goal of rolling out laws and regulations to satisfy debts owed to SMEs.
According to China's Premier Li, the country has been exerting much effort in relieving itself of debts since China is also facing disputes. Thus, he noted that the arrears problem should be settled more efficiently and through mediation, consultation, and judicial means.
Li added that a major part of the overdue payments have adverse effects to government credit and that the departments should establish concrete plans to help alleviate China's economic problems. Moreover, Li manifested that in doing so, the business environment in the country would improve, market confidence would be recovered, and improve Chinese citizens' lives in general.
It was also discussed during the meeting that departments who have larger sums of debts owed to private firms and SMEs would be under the direction and regulation of task forces. Moreover, it announced that provincial governments would shoulder chief responsibility for the repayments and coordinate their plans for subordinate cities and counties who cannot establish concrete plans.
Lastly, the meeting also discussed the implementation of effective regulation that would ensure the payment of wage to migrant workers. The regulation was explained to follow an inter-agency mechanism as well.
