According to a statement released by People’s Bank of China on Sunday, the Chinese government will be offering $43 billion (300 billion yuan) to the businesses working to fight the novel coronavirus outbreak. The money will be transferred by the next week.
In the span of a couple of months, the epidemic has affected thousands – 40660 reported cases with 910 deaths, out of which only 3,669 have successfully recovered. Initially discovered after several cases of pneumonia were reported in the central city of Wuhan, in China, the outbreak has led to a “severe health crisis in China”.
The novel coronavirus also led to a soft quarantine or a lock-down in several of Chinese cities, where around 56 million people were stopped from travelling in or out of the country. However, despite the drastic measures, due to its contagious nature, the infection was able to spread to around 20 Chinese cities and more than 25 countries across the globe. Out of the reported cases, 40,261 are in China, Hong Kong and Macau.
Although, no definitive treatment is available in the market yet, many pharmaceutical companies are currently racing to develop a treatment plan for the virus. Firms like Novavax, AbbVie and Vir Biotechnology are among those developing potential vaccines for the disease.
The People’s Bank of China (PBOC) announced that it will be providing monetary support to help fight the epidemic. The initial funds will be targeted to “support financial institutions to give loans to key enterprises involved in the prevention and control of the epidemic”.
According to Liu Guoqiang, deputy governor of the bank, the special funding will be given to ‘nine major national banks’, along with small, local banks in over 10 provinces, mainly to help companies and firms at both national and local levels. The major areas comprise of “Hubei province—the epicentre of the virus outbreak—as well as Zhejiang, Guangdong, the capital city of Beijing and financial hub Shanghai.”
The progress of the funding will be tracked by the bank and any discrepancy will lead to major penalties for the offender. Guoqiang also added, “financial institutions need to review and issue loans quickly, and that they should also release funds within two days”.
According to PBOC’s website, “It was pointed out at the conference that the PBC system shall put into use the special central bank lending in a rapid and targeted manner, bearing and fulfilling the responsibilities in respective jurisdictions, and fully leveraging the role in backing the combat against the epidemic. The PBC system shall guide financial institutions to proactively enquire about the financing needs of the key enterprises and grant loans in an effective manner, so as to support their production and operation.”
It further states, “Guidance shall also be provided to financial institutions to conduct sound post-loan management and assist auditing agencies in the special tracking and auditing of the interest-subsidized loans, preventing improper or inefficient use of the funds by the financial institutions.”