China allocates almost $16 billion in coronavirus related funding

BEIJING (Reuters) – Various Chinese government entities have allocated 110.48 billion yuan ($16 billion) in coronavirus-related funding as of March 4, Vice Finance Minister Xu Hongcai said at a press briefing on Thursday.

Of that amount, about 71.43 billion yuan has been used, leaving 39.05 billion yuan to spend, Xu said.

China would ensure the smooth operation of local governments amid the coronavirus outbreak and that the finance ministry will ensure the funding needs of Hubei province, the epicenter of the outbreak, Xu said.

He warned that the outbreak could temporarily affect the government’s revenues but he expected the pressure on the government’s fiscal position to ease as the economy recovered.

He added that Beijing would roll out targeted and phased measures to help virus-hit sectors, without elaborating.

China has said it would study phased tax cuts to help struggling small- and medium-sized firms facing difficulties because of the outbreak.

China saw an uptick in new coronavirus cases on Thursday driven by more cases in Wuhan, the provincial capital of Hubei, where the virus is believed to have emerged in a market late last year.

Some local governments were facing funding difficulties, said Liu Jinrun, an official at the finance ministry, during the briefing.

Xu said that fiscal revenues in Hubei were relatively stable in January, but the situation worsened in February, when the province only had “sporadic” revenue.

Xu said the ministry is stepping up transfer payments to local governments, especially those hit hard by the virus outbreak.

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