China to introduce policies to lessen burden on enterprises and individuals

China will take measures to reduce government-levied charges and operating service charges in order to further lessen the burden on businesses and individuals.The personal postal articles tax rates will be lowered to expand imports and boost consumption, the State Council executive meeting chaired by Premier Li Keqiang decided Wednesday.Li pledged in this year's government work report to take reform measures for lowered business-related charges. Electricity costs in manufacturing will be reduced, and the average electricity price for general industrial and commercial businesses will be cut by another 10 percent.A number of railway and port charges will be abolished or reduced. The average broadband service rates for small and medium-sized enterprises will be cut by another 15 percent and the average rates for mobile internet services by more than 20 percent.It was decided at the meeting that starting July 1, charges on real estate registration will be cut or canceled. The coverage of patent application and annual fee reductions will be expanded.Charges on exit and entry travel documents such as private passports, registration of certain trademarks, and radio frequency uses in electricity and the Internet of Vehicles will be further reduced. Significant reductions in these charges are required.For example, the ownership registration fee for real estate such as garage and parking spots will be reduced from 550 yuan (about 82 US dollars) to 80 yuan each. And the registration fee for continued use of trademarks will go down from 1,000 yuan to 500 yuan.Payments to national major water conservancy construction fund and the civil aviation development fund will be halved. Charges for national cultural programs faced by centrally-administrated enterprises and institutions will be cut by half, effective until the end of 2024.It was also decided at the meeting to reduce mobile internet service rates and lower broadband service rates for small and medium-sized enterprises by about 180 billion yuan in 2019, trim the average electricity price for general industrial and commercial businesses, lower prices for rail freight transport, cut or merge port charges, and revoke the charge for citizens' ID information certification.The measures identified at the meeting Wednesday are the most recent moves for fee reduction following the lowering of the social insurance contribution rate. Full delivery of these measures is expected to lighten the fee burden on companies and individuals by more than 300 billion yuan in 2019."Tax and fee cuts are our key measure to tackle the downward economic pressure this year. They are a major policy initiative. Cutting fees could serve multiple purposes. All government departments must do their best to effectively ease the burden on businesses and deliver real benefits to consumers," Li said. "This will also boost our industrial development."Participants of the meeting also worked out measures for cutting the personal postal articles tax rates. Starting April 9, the tax rate on food and medicine will be cut from 15 percent to 13 percent, and the tax rate on textiles and electrical appliances will be trimmed from 25 percent to 20 percent.

Hunan High-Tech Industry Added Value Surpasses 800 Billion CNY

In 2018, Hunan provincial high-tech industry realized an added value of over 846 billion CNY, a year-on-year increase of 14.0% and accounting for 23.2% of the total GDP. The statistics was announced by the Hunan Provincial Bureau of Statistics on March 25, 2019. Each of four major sectors – new materials, high-tech transformation of traditional industries, electronic information, and biology and new medicine – exceeded 100 billion CNY in added value.New materials industry and high-tech transformation of traditional industries, two major pillars of Hunan’s high-tech industry, witnessed prominent progress. Over the past five years, their total added value, sales revenue, and profits and taxes accounted for about 50% of the total of provincial high-tech industries. In 2018, the provincial high-tech industry saw a notable momentum of upgrades and optimization. The added value of aerospace, resources and environment, and biology and new medicine industries grew by 24%, 18.4%, and 14.7%, respectively. The growth rates were much higher than the average.The strength of key enterprises has been enhanced as the industry scale expanded. Last year, there were 4,104 recognized high-tech enterprises included in the Hunan Provincial Science and Technology Department annual statistics, an increase of 1,276. They realized an added value of more than 50 billion CNY, an increase of 14.1%. There were 3,858 enterprises with an output value of over 100 million CNY, an increase of 133 over 2017. The total value added, sales income, and profits and taxes accounted for 93.4%, 92.7%, and 93.5% of the provincial total, respectively. They played important supporting roles to the high-tech industry development.Hunan will continue to develop more high-tech enterprises in the future. By the end of 2018, Hunan has 49 national-level enterprise technological centers. Further policy optimization is ongoing for high-tech enterprise development.

Manufacturing returns to growth

The Caixin/Markit Manufacturing Purchasing Managers Index showed that China entered expansion territory in March, indicating a notable improvement in the country's manufacturing sector.Economists said the rise showed policies to bolster growth have begun to pay off, and the world's second-largest economy is likely to achieve steady expansion this year.The PMI, released on Monday, recovered for the second consecutive month and stood at 50.8 in March, versus 49.9 in February.A reading above 50 indicates expansion, while one below reflects contraction.The result was in line with the official PMI reading, which came in at 50.5 in March, compared with 49.2 in February, with all five subindexes registering improvements, the National Bureau of Statistics said on Sunday."Activity in the manufacturing sector expanded as the Spring Festival holiday ended, while higher market confidence also contributed to the rise in the PMI," said Liu Chunsheng, an associate professor of economics at Central University of Finance and Economics in Beijing.Market confidence has been bolstered by tax cuts and other policies aimed at stabilizing the economy, concrete reform and opening-up measures, and recent progress in trade talks, Liu said."Moreover, signs of stabilizing employment are very encouraging, as they may point to more room for policymakers to maneuver toward a balance between economic restructuring and stable growth," he added.According to Caixin, staffing levels at goods producers increased in March, marking the first expansion since October 2013. Meanwhile, they have an optimistic outlook regarding production for the coming year, which improved to a 10-month high in March.Despite the improvements in the economic situation, potential risks that may weigh on the Chinese economy still exist, ranging from external uncertainties to domestic factors such as sluggish consumption and financial risks, economists said.Michael Spence, a professor at New York University and a Nobel laureate in economics, said the Chinese economy will "slow a bit" this year amid the slowing global economy and trade frictions."And I think the reforms, which have been announced, are serious reforms, ... helping get rid of at least a component of the trade frictions," Spence said on March 23 at the University of International Business and Economics in Beijing.To tackle economic headwinds, China has pledged to deepen reforms to vitalize market entities, such as value-added tax reforms that took effect on Monday meant to lower burdens on enterprises.Moreover, China recently adopted the Foreign Investment Law, a move aimed at building a business-friendly environment that is more integrated with the world.Hua Changchun, chief economist at Guotai Junan Securities, said in a research note that infrastructure construction is expected to drive recovery in the second quarter, adding that full-year GDP growth may come in at 6.4 percent.The Caixin/Markit Manufacturing PMI showed both domestic and external demand improved, said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.Source : China Daily

Boao Forum to unite nations for sustainable economic development

The Boao Forum for Asia 2019 conference aims to unite Asian countries, seek solutions and consensus in maintaining sustainable economic development given the uncertainties of this year's economic outlook, according to Li Baodong, secretary general of Boao Forum for Asia, at a press conference on Tuesday."Asian countries should work together to usher the Belt and Road Initiative into a new stage," said Li, adding that the nations should also promote WTO reform and improve the international competitiveness of the Asian countries.One of the highlights of this year's forum is to provide intelligence support to the Hainan FTZ, Li said, adding that experts from international FTZs are invited to contribute their thoughts and experiences this year to the construction of Hainan FTZ.On the construction of the Hainan Free Trade Zone, which was initiated last year, Li said China will build the Hainan FTZ with its own features and characteristics. "We have a very good start with support from all over the country," Li said.Themed as Shared future, Concerted action, Common development, the Boao forum has attracted more than 2,000 attendees from over 60 countries and regions worldwide, including 14 heads of state and more than 140 ministerial-level officials, Li added."Thousands of entrepreneurs, many from the Fortune 500 companies, as well as experts will contribute their views and thoughts on boosting Asian and the world economy at the upcoming four-day forum," the secretary general said.Source: China Daily

Investment law to ensure level playing field

China will continuously amend the negative list regarding foreign investment in the country and improve the mechanisms through which global investors can express their complaints to facilitate the implementation of the newly passed Foreign Investment Law, said a senior commerce official.Although the Foreign Investment Law doesn't contain too many clauses, its primary function, as a fundamental law, is to build a framework to protect the rights and interests of global businesses, said Li Chenggang, assistant minister of commerce.The Ministry of Commerce is currently in partnership with the Ministry of Justice and other related ministries to formulate detailed rules based on the basic principles and clauses of the Foreign Investment Law, according to the official.Li said the law would play a crucial role in enabling a better business environment in China."However, we can by no means improve our business environment merely by resorting to the Foreign Investment Law," said Li. "We must ensure the implementation of other laws like those on intellectual property right and civil affairs, as well as those cracking down on criminal offenses."China promulgated its first law to regulate foreign investment-related issues in 1979 when reform and opening up just started. The country has promulgated some other laws and regulations since then. They were called the "three law framework" governing foreign investment in China.With the continuous deepening of the reform and opening-up process, these laws and related regulations were adjusted. For instance, they were amended in 2001 when China was preparing to join the World Trade Organization, and the government made adjustments to the application of relevant laws when the country set up the first pilot free trade zone and implemented the negative list model on a trial basis in 2013."China's legal system governing foreign investment has been keeping pace with changes on the ground. In particular, we need to introduce the system of pre-establishment national treatment and negative list for foreign investment. Such new strategic goals naturally call for the commensurate improvement of the country's legal system," said Li.As China is granting national treatment to foreign investment in a more comprehensive manner, many systems should be stipulated by other laws and regulations that are applicable to both home and foreign investment alike, said Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies.The law will explicitly support global companies in China in carrying out more independent innovation and market expansion, as well as partner with domestic companies to develop both Chinese and third-party country markets in economies related to the Belt and Road Initiative, he said.China currently is home to more than 2,000 regional headquarters, research and development centers of multinationals, showing their confidence in and recognition of the country's business environment. Foreign direct investment in China rose 3 percent year-on-year to $135 billion in 2018, data from the Ministry of Commerce show.

Greater Bay Area will be fostered with regional integration

China unveiled the outline development plan for the Guangdong-Hong Kong-Macao Greater Bay Area, aiming to develop the region into “a role model of high-quality development.”The plan was released by the Central Committee of the Communist Party of China and the State Council.The plan, an important outline document guiding the current and future cooperation and development of the Greater Bay Area, covers the period from now to 2022 in the immediate term and extends to 2035 in the long term.Industrial systemChina aims to build a globally competitive modern industrial system for the Guangdong-Hong Kong-Macao Greater Bay Area, according to the development plan.Efforts will be made to expedite the development of the advanced manufacturing industry, nurture and strengthen strategic emerging industries, expedite the development of modern service industries, and vigorously develop the marine economy, according to the plan.The plan says measures should be taken to deepen supply-side structural reform, nurture new industries as well as new business types and models, support the transformation and upgrading of traditional industries, and expedite the development of advanced manufacturing and modern service industries.It also stresses the need to raise industries’ development levels to advanced international standards, promote the complementarity, coordination and interconnected development of industries, and nurture a number of world-class industry clusters.The Guangdong-Hong Kong-Macao Greater Bay Area will foster closer collaboration and integration within the region, an industry official said."It should be a commercial advantage for companies, and this is how business works," said Gutierrez, a former secretary of commerce of the United States. "The technology is going to be made by companies, whether public or private, but not governments."