Fri, Aug 31, 2018 - Page 12 News List

China announces tax cuts to support economy

Reuters, BEIJING

Chin’s Cabinet yesterday announced new measures to cut costs for companies as policymakers look to support growth amid an escalating trade war with the US that threatens exporters.

The Chinese State Council announced tax cuts that should reduce firms’ costs by more than 45 billion yuan (US$6.59 billion) this year, state radio reported.

Beijing is speeding up infrastructure spending and offering help to smaller companies as China’s economy cools and US trade tensions intensify.

Beijing has pledged to use a more proactive fiscal policy as economic growth slows and companies struggle with tight liquidity and weak demand.

“Cutting taxes and reducing costs are key initiatives in implementing active fiscal policy and ensuring a stable economy,” the council said.

At the meeting, chaired by Chinese Premier Li Keqiang (李克強), the council also said it would increase the rate of export tax rebates for some products, as well as increasing the amount banks can lend to small firms and not have to pay taxes on interest income.

Foreign investors will not have to pay enterprise or value-added taxes on interest income earned in the domestic bond market for three years, the council said.

In other news, China is to make economic changes at its own pace, regardless of US pressure, and their worsening dispute over technology policy can only be solved through negotiations as equals, Chinese Ministry of Commerce spokesman Gao Feng (高峰) said.

The comments reinforced Beijing’s rejection of US demands to scale back technology plans that Washington says breach China’s free-trade commitments.

Gao gave no indication of plans for more talks over the conflict.

“No matter what measures the United States takes to exert pressure, China will proceed with reform and opening up at its own pace,” he said.

Additional reporting by AP

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