Archive for ‘tax cuts’

11/05/2019

Premier Li underlines tax cuts to benefit enterprises, boost market vitality

CHINA-BEIJING-LI KEQIANG-SYMPOSIUM ON TAX CUTS (CN)

Chinese Premier Li Keqiang, also a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, presides over a symposium on the implementation of reducing taxes and fees in Beijing, capital of China, May 10, 2019. Vice Premier Han Zheng, also a member of the Standing Committee of the Political Bureau of the CPC Central Committee, attended the symposium. (Xinhua/Pang Xinglei)

BEIJING, May 10 (Xinhua) — Chinese Premier Li Keqiang on Friday called for more efforts to implement tax and fee cuts in a bid to let enterprises enjoy concrete benefits and further boost the vitality of market entities.

Li, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, made the remarks at a symposium on the implementation of reducing taxes and fees.

Larger-scale tax and fee reductions are a key measure to improve the business environment and boost the vitality of market entities, which not only contribute to steady economic growth and stable employment but also encourage enterprises to increase investment on innovation and enhance competitiveness, Li said.

As a key task for this year, tax and fee cuts have been carried out and are proceeding as expected, Li said, demanding more efforts to ensure the complete implementation of related policies.

At the meeting, several entrepreneurs shared their opinions and made suggestions on tax and fee reductions.

The tax burden for the manufacturing sector should be lowered significantly and industries which create many jobs such as construction should also see tax reductions.

Li urged efforts to ensure the tax burden for all industries is lowered and micro and small enterprises should see a substantive reduction of their tax burden.

Measures, including stricter market supervision, will be taken to guarantee the effects of tax and fee cuts.

Besides tax and fee-reduction policies, China plans to unveil more measures to deepen reform and opening-up, encourage entrepreneurship and innovation as well as foster fair competition to withstand economic hardship amid downward pressure, he said.

Vice Premier Han Zheng, also a member of the Standing Committee of the Political Bureau of the CPC Central Committee, attended the symposium.

Source: Xinhua

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06/03/2019

China’s February exports seen falling most in 2 years, imports down again – Reuters Poll

BEIJING (Reuters) – China’s exports likely contracted in February after a surprise bounce in January, while imports fell for a third straight month, a Reuters poll showed, heightening anxiety over whether Washington and Beijing can resolve deep differences over trade.

China’s exports in February are expected to have fallen 4.8 percent from a year earlier, according to the median estimate of 32 economists in a Reuters poll, following a 9.1 percent rise in January.

Such a drop would be the biggest since December 2016, and suggest a further weakening in global demand.

Imports in February are expected to have fallen 1.4 percent from a year earlier, compared with the previous month’s 1.5 percent decline.Stronger-than-expected imports could prompt some China watchers to say the economy is showing signs of bottoming out in response to a string of stimulus measures in 2018.

But most analysts typically caution that China’s data early in the year can be highly distorted by the timing of the Lunar New Year holidays, when some business rush out shipments or scale back output before shutting for a extended break. As such, analysts’ estimates for February varied widely.

TRADE DEAL NOT A SILVER BULLET

In recent weeks, the United States and China appear to have moved closer to a trade deal that would roll back tit-for-tat tariffs on each others’ goods, with Beijing making pledges on structural economic changes, a source briefed on negotiations said on Sunday.

But President Donald Trump will reject any pact that is not perfect, Secretary of State Mike Pompeo said this week.
Even if concrete steps such as dismantling tariffs are agreed, it would not be a panacea for all of China’s economic woes. Its exporters would have to piece supply chains back together, win back market share and contend with slowing demand globally.
Factory surveys have suggested exports and imports will remain weak in coming months, with February’s official gauge showing export orders fell to their weakest level since the global financial crisis.
China’s overall trade surplus is seen to have shrunk sharply to $26.38 billion in February from $39.16 billion the previous month, according to the Reuters poll.
In response to growing domestic and global pressure, China’s government this week unveiled a 2019 economic growth target of 6.0-6.5 percent, down from an actual 6.6 percent in 2018, the slowest pace in nearly 30 years.
China to slash taxes, boost lending to prop up slowing economy
Premier Li Keqiang told parliament on Tuesday that China will shore up the economy through billions of dollars in additional tax cuts and infrastructure spending, and will lower real interest rates.
“A set of pro-growth measures are planned despite positive progress in U.S.-China trade talks, which makes us think that either China doesn’t have full confidence in a trade truce or that the damages from the trade conflict cannot easily be undone,” said Iris Pang, Greater China economist at ING.
Source: Reuters
12/01/2019

China’s premier says tax cuts support employment, economic stability

SHANGHAI (Reuters) – China’s plans for tax cuts targeting smaller companies will help to support employment and economic stability, and will expand the country’s tax base over the long term, Premier Li Keqiang was quoted as saying on Saturday.

“Implementing tax cuts for small and micro enterprises is mainly to support employment,” Li said in comments posted on the Chinese government’s website.

Developing and strengthening small companies is linked to economic stability and stable employment, he said.

“Looking at the long term, this will continue to expand the tax base, conserve tax resources and ultimately achieve wins for mass employment, corporate profits and fiscal revenues,” he was quoted as saying, referring to the corporate tax cuts.

Li’s comments come amid growing official concern over China’s slowing economic growth and its impact on the labour market.

Chinese authorities plan to set a lower economic growth target of 6 to 6.5 percent in 2019, compared with “around” 6.5 percent in 2018, sources told Reuters, as weakening domestic demand and a damaging trade war with the United States drag on business activity and consumer confidence.

Analysts expect that China’s economy grew around 6.6 percent last year, its slowest pace since 1990, and it is expected to cool further in coming months before a slew of support measures start to kick in.

“The bottom line for the policymakers is social stability, which is crucially tied to the unemployment rate and job creation,” analysts at BoAML said in a recent note. “With U.S.-China trade risks still looming large, we believe policymakers would not hesitate to take pre-emptive measures to stabilise expectations on job stability.”

More growth boosting steps are expected this year as policymakers seek to avert the risk of a sharper slowdown.

China’s State Council, or cabinet, said on Jan. 9 that it would further reduce taxes for smaller companies. On Friday, Finance Minister Liu Kun said authorities would step up tax and fee cuts to lower corporate burdens.

12/01/2019

Larger tax cut in pipeline, says China’s finance minister

BEIJING, Jan. 11 (Xinhua) — China is mulling tax reductions on a larger scale this year to bring down the burden on the real economy and improve market confidence, Minister of Finance Liu Kun has said.

Liu said in an interview on Thursday that the tax cut in the pipeline would be inclusive, simple and practical, and be implemented at an early date.

His remarks came on the heels of a new batch of tax breaks for small and micro firms, which comprised of lower tax rates, higher tax thresholds and favorable policies for investors of tech startups.

“Some 17.98 million businesses in China are covered by the inclusive tax reduction, accounting for more than 95 percent of the total corporate taxpayers and with 98 percent of them privately owned,” Liu said.

China will also step up efforts to push forward value-added tax reform for substantive tax cuts, implement special individual income tax deductions, and ease the business burden from social insurance payments, Liu said.

With intensive tax breaks, China is estimated to save a total of 1.3 trillion yuan (nearly 200 billion U.S. dollars) for market entities in 2018, outshining similar moves by any other countries in terms of scale and ratio to GDP.

While persisting in tax cuts, China will take bolder and more effective measures to implement proactive fiscal policy, Liu said.

“The fiscal expenditure will be improved moderately according to the economic situation and demand, and there will be a relatively substantial increase in the issuance of special-purpose local government bonds to support projects under construction and fix shortcomings,” Liu said.

China will make fiscal funds more effective and channel more capital into weak areas including poverty relief, agriculture, innovation and environmental protection, Liu said, adding that the general government spending would be cut by more than 5 percent.

Liu denied concerns about massive stimulus and stressed that the measures were counter-cyclical, aimed to strike a balance between stable growth and risk prevention, and would be more market-oriented and law-based.

China has assigned 1.39 trillion yuan worth of bonds to local governments, which Liu said would be used to finance the development of poor areas and major projects of railways, water conservation and rural revitalization.

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