China vows ‘stronger and more effective’ proactive fiscal policy
Print Edition
THE State Council, China’s Cabinet, yesterday pledged to step up fiscal policy support and strengthen targeted controls to combat downward pressure on the economy.
“To ensure the economy operates within a reasonable range, proactive fiscal policy needs to be stronger and more effective,” said a statement released after the executive meeting, which was presided over by Premier Li Keqiang.
The meeting decided to extend tax break policies to more micro and small firms. From 2015 to the end of 2017, companies with annual taxable income under 200,000 yuan (US$31,960) will have their corporate tax halved. The threshold was 100,000 yuan before.
In an effort to activate private investments, the Cabinet said taxes on investment earnings from non-monetary assets would be levied in stages rather than a one-off collection.
In addition, China will cut the unemployment insurance rate to 2 percent from 3 percent previously, which is estimated to save over 40 billion yuan for businesses and employees annually.
The Cabinet also pledged to speed up construction of major water projects in the less developed central and western regions. Approvals on the new projects will be concluded by the end of July and over 90 percent of funds from the central budget will be allocated by the end of June, according to the statement.
The set of policy adjustments comes in the wake of the economy growing by 7.4 percent in 2014, its weakest annual expansion in 24 years. A string of economic indicators, including manufacturing and trade data, all suggest continued weakness.
The HSBC flash manufacturing Purchasing Managers’ Index improved slightly in February, rising to a four-month high of 50.1, data showed yesterday. But the bank cautioned that domestic economic activity was likely to remain sluggish and external demand looked uncertain.
Despite subdued economic growth, policy-makers have moved more cautiously than the market expected. To support growth, the central bank earlier this month decided to lower reserve requirement ratio, the minimum level of reserves banks must hold, by 50 basis points from February 5, the first universal ratio cut since May 2012.
This followed an unexpected move to slash interest rates in November, also the first cut in over two years.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
