The impacts of the increasingly complex international environment and the resurgence of COVID-19 at home are placing growing pressure on China's economy.

Micro, small and medium-sized enterprises (MSMEs) are a key foundation for the country to maintain steady economic and employment growth, and they also play a pivotal role in improving the stability and competitiveness of China's industrial chain and supply chains. For these reasons, the Chinese Government has recently formulated, in addition to the policies introduced in the past two years to relieve MSMEs, another package of measures to help them out of difficulties. These include special relief funds offered to MSMEs and self-employed households, and another 1.6 trillion yuan ($247.1 billion) in inclusive loans to be extended by large state-owned banks to micro and small enterprises.

Meanwhile, in response to rising uncertainties, the Central Government has called on local governments to implement policies to lower costs of doing business and balance the control of outbreaks with economic growth. For instance, Shanghai announced

on April 21 its banks would reduce or remove fees charged to MSMEs for account management, payment and settlement, and provide them more credit support. The financial hub began to reopen commercial outlets such as shopping malls, convenience stores and pharmacies as of May 16 after weeks of closed management to control the spread of COVID-19. Guangdong Province has issued favorable policies such as offering MSMEs more opportunities in government procurement and subsidizing social security contribution payment by micro and small enterprises in the manufacturing sector.

Currently, major difficulties faced by MSMEs include decreasing sales revenues due to COVID-19 control measures, shortages of working capital, and growing production costs due to the increasing commodity prices of capital goods. The introduction of the latest relief policies is very timely, which demonstrates the government's determination to support the development of MSMEs.

Leveraging multi-pronged macroeconomic policies is the key to minimizing the COVID-19 impact and ensuring the economy operates in a reasonable range. With measures to coordinate pandemic control with economic and social development taking effect, short-term contractions are expected to decrease.