Published 17:53 IST, May 26th 2020
COVID-19: China to subsidise cargo flights to support global supply chains
China’s finance ministry, on May 26, reportedly said that it would subsidise both Chinese and foreign cargo flights, moving in and out of the country.
China’s finance ministry, on May 26, reportedly said that it would subsidise both Chinese and foreign cargo flights, moving in and out of the country. This move, which aims to maintain the global supply chains and support cargo industry, comes as China witnessed a major plunge in its production and supply due to COVID-19. China, where the pandemic began in December, was the first economy to shut down and the first to start reopening in March.
"The cash support will be back-dated to cover any flights from April 1 and will be continued until June 30", the country's finance ministry said in a statement.
The ministry also revealed if passenger planes get converted into a cargo plane, 80 per cent of the cost would be subsided. Elaborating further it said that, all the cargo flights would be awarded on the basis of distance, that is, flight miles. Meanwhile, a report released last week stated that global growth would struggle to bounce back from the lockdowns, travel restrictions and business closures meant to contain the pandemic.
IHS Markit reportedly said that it expects the world economy to shrink 5.5% this year, triple the damage it sustained in the 2008 financial crisis, and then struggle to regain traction. “While growth in the hardest-hit economies may snap back briefly, the momentum will soon fade,” the financial research firm warned. It expects the U.S. economy to contract 7.3% this year and the collective economy of the 19 European countries that share the euro currency to recoil 8.6%.
Chinese efforts to revive economy
In China, the ruling party has handed out shopping vouchers, cut taxes and promised entrepreneurs low-interest loans after first-quarter activity shrank 6.8% from a year earlier. Still, forecasters expect little to no economic growth this year. Factory output rose 3.9% in April from a year earlier, an improvement over the previous month’s 1.1% contraction. Manufacturers have been hurt by weak demand for exports in the United States, Europe and other major markets that have closed to fight the virus.
Updated 17:53 IST, May 26th 2020