Thu, Mar 08, 2018 - Page 10 News List

Tax cuts, stable debt ratio for China

COMPARABLE RATES:China is from next month to begin releasing monthly jobless figures, a shift from the quarterly statistics that have hovered around 4% for 15 years


Chinese Minister of Finance Xiao Jie speaks to a news conference on the sidelines of the National People’s Congress in Beijing yesterday.

Photo: Reuters

Chinese Minister of Finance Xiao Jie (肖捷) said China is to keep cutting taxes, including increasing breaks for small and medium-sized businesses and easing burdens on individuals.

Authorities would also continue value-added tax reforms, Xiao said yesterday at a briefing on the sidelines of the National People’s Congress in Beijing.

Officials drafting a property tax are considering using common approaches adopted in other nations, Chinese Vice Minister of Finance Shi Yaobin (史耀斌) said, without indicating when such a levy might take effect.

Xiao expanded on earlier announcements, saying China plans an additional 300 billion yuan (US$47.5 billion) of reductions in administrative fees and operating charges to bring taxes and fees down by 1.1 trillion yuan.

Policymakers on Monday pledged 800 billion yuan of tax cuts for companies and individuals last year to support growth and remain a competitive draw for investors.

They also flagged the property tax legislation push and said thresholds for levying personal income taxes would be lifted.

The process of revising the personal income tax law would be accelerated, the officials said.

“Everyone here will benefit,” Xiao said, drawing laughter from those in the room.

China’s proactive fiscal policy remains unchanged, Xiao said, after the ministry on Monday announced that it cut the budget deficit goal for the first time since 2012 to 2.6 percent of GDP from 3 percent.

The government is boosting spending on special-purpose bonds and budgeted infrastructure investment, Xiao said.

The government debt-to-GDP ratio last year fell to 36.2 percent from 36.7 percent the previous year, and it would not change significantly in the future, Xiao said, adding that outstanding government debt was 29.95 trillion yuan last year.

China’s economy last year expanded by 6.9 percent, the first full-year acceleration since 2010.

With expansion on a solid footing and debt surging, officials have signaled they want to move away from pursuing rapid growth at any cost.

The government has scrapped numerical growth targets on the broad M2 money supply, signaling a departure from the credit-led expansion of the past.

The ministry would this year boost fiscal support on smaller enterprises and aim to help them by steering more government procurement their way, Xiao said.

Separately, China is to soon get its first regularly updated monthly unemployment rate similar to closely watched gauges in other major economies like the US and Europe.

Monthly updates of China’s survey-based urban jobless rate are to be released from next month, the Chinese National Bureau of Statistics said yesterday in response to a Bloomberg News query.

Until now, the only regular official unemployment rate has been a quarterly gauge of urban joblessness that has not deviated much from about 4 percent over the past 15 years, despite economic shifts.

The surveyed jobless rate at the end of last year stood at 4.98 percent, the bureau reported in January.

The first release of the new rate is planned for some time next month and would give data for this month, the bureau told Bloomberg, without specifying an exact announcement date or saying how many cities or households the rate will be based on.

Prior releases of the index have included different samples drawn from varying numbers of cities, making comparison over time difficult.

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