Ladies and gentlemen, good afternoon and welcome to this press conference organized by the Joint Prevention and Control Mechanism of the State Council. The State Council's executive meeting chaired by Premier Li Keqiang on February 18 has decided to temporarily exempt or lower the social and medical insurance premiums of staff paid by enterprises and defer the collection of housing provident funds to mitigate the impact of the epidemic on enterprises and ensure stable employment.
Today we have invited Yu Weiping, Vice Minister of Finance; You Jun, Vice Minister of Human Resources and Social Security; Ni Hong, Vice Minister of Housing and Urban-Rural Development; Wang Lujin, Deputy Director of the State Taxation Administration; and Chen Jinfu, Deputy Director of the National Healthcare Security Administration. They will explain the policies and answer any questions you might have. I will give the floor to Mr. You first.
Friends from the media, good afternoon. Thank you for your hard work to cover the news about COVID-19. Your workload has increased and some of you have worked day and night, including our host from the State Council Information Office, Hu Kaihong. You have all greatly contributed in different ways to win the battle against the epidemic and I would like to show my appreciation. Thank you for your long-time support to the cause of human resources and social security.
Xi Jinping, General Secretary of the Communist Party of China (CPC) Central Committee, has stressed the need to coordinate the work of epidemic prevention and economic and social development. He has called for continued research on and the introduction of provisional targeted tax and fee reduction measures to ease the difficulties of enterprises, implement employment priority policies with greater efforts, and improve fiscal, taxation, financial and social security policies to support small and medium-sized enterprises (SMEs).
As Premier Li Keqiang stressed at the State Council executive meeting on February 18, keeping employment stable requires steady performance by enterprises. The meeting has decided to temporarily exempt or lower enterprises' pension, unemployment and work-relatedinjury compensation insurance payments to mitigate the impact of the epidemic on them, especially micro enterprises and SMEs, so that they can resume production after a buffer period. The premier saidthat employment must be given a first-order priority in maintaining stability in six key areas, namely employment, finance, foreign trade, foreign investment, domestic investment, and expectation.
In order to implement the spirit of General Secretary Xi's instructions and the decisions and deployment of the CPC Central Committee and the State Council, the Ministry of Human Resources and Social Security, the Ministry of Finance and the State Taxation Administration have issued a guideline on temporarily exempting or lowering social insurance payments of enterprises with three measures: waiving, lowering and deferring social insurance payments. From February 2020, micro enterprises and SMEs in all provinces may be exempted from social insurance payments for pension, unemployment and work-related injury compensation for no more than five months until June.
In Hubei Province, the range of exemption may be expanded to all enterprises participating in the social insurance program. For large enterprises and other companies participating in the program in other provinces, the three types of social insurance payments may be halved, with the period of reduction not exceeding three months. Since the impact of the epidemic on government agencies and public institutions has been moderate, the exemption policies will not cover such entities. Enterprises in serious difficulties due to the epidemic may apply for deferring the payment for a period not exceeding six months, with no late fees for this period.
In order to ensure that the relief policy is put in place, the guideline also proposes to ensure that the legitimate rights and interests of employees are not affected, and to ensure their social insurance benefits are paid in full and on time. The provincial authorities should effectively assume the main responsibility. It also puts forward requirements for promoting the provincial coordination of social insurance and further implementing the unified national pension fund system. According to the guideline, the proportion of pension funds allocated under the system will be increased to 4 percent this year to support the regions facing the greatest difficulties.
This phase of temporary exemption of the three types of social insurance payments is based on the operation and balance of the social insurance funds. Given the strong supporting capacity of the funds, the social insurance system can still perform well after the implementation of the policies, which can ensure that pensions and other social insurance benefits are paid to individuals in full and on time. The exemption is aimed at further easing the burden on companies following the introduction of policies to reduce social security contribution rates in 2019. The reduction will be stronger and produce greater effects than last year. Introduced with great determination and efforts, the policies are aimed at reducing and exempting the social insurance payments of enterprises, helping them overcome operational difficulties as well as stabilizing and expanding employment to implement the instructions and requirements of General Secretary Xi as well as the decisions and deployment of the CPC Central Committee and the State Council, mitigate the impacts of the epidemic and ensure economic and social stability. Thank you.