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Key takeaways from China's pro-growth measures

Xinhua | Updated: 2019-01-30 16:18
Workers assemble engines at a factory in Weifang, Shandong province. [Photo/China Daily]

BEIJING - With China's economy shifting to a slower but more sustainable growth model, policy makers are stepping up efforts to boost growth and confidence against external headwinds.

Fresh moves including tax cuts, increased fiscal spending, consumption boost and stabilizing employment have been unveiled.

Here are the major takeaways from the pro-growth measures:

Boosting consumption

China on Tuesday unveiled a flurry of measures aimed at boosting sales of items, including autos, home appliances and information services.

The country vowed to promote auto replacement, especially in rural areas, accelerate development of the second-hand car market and adjust subsidies to galvanize sales of new energy vehicles (NEVs).

Dong Dajian, an official at the Ministry of Industry and Information Technology, expects NEV sales to exceed 1.5 million units this year, up from 1.26 million in 2018.

The government will support sales of green and smart home appliances, and local authorities will mull plans to offer consumer subsidies for such products.

Liu Yunan, an official at the National Development and Reform Commission, expects the incentives to lift sales of such products by 150 million units, worth around 700 billion yuan ($104.48 billion), between 2019 and 2021.

Tax, fee reduction

The country rolled out a new batch of tax breaks for smaller businesses, including lower tax rates, higher tax thresholds and favorable policies for investors of tech startups.

The inclusive tax reduction covers 17.98 million businesses, accounting for more than 95 percent of the country's corporate tax payers, 98 percent of which are private businesses.

Value-added tax threshold on small-scale tax payers was raised from 30,000 yuan to 100,000 yuan of monthly sales.

The country also unveiled special individual income tax deductions to lower tax burdens on those who have certain expenditures in areas such as children's education, continuing education, health treatment for serious diseases, housing loan interests, rent and elderly care.

Expanding investment

The country will increase investment with a focus on construction and renovation, prioritizing areas including artificial intelligence, internet of things, major infrastructure projects and technical transformation and equipment replacement in the manufacturing sector.

The country also aims to make fiscal funds more effective and channel more capital into weak areas including poverty relief, agriculture, innovation and environmental protection.

Ning Jizhe, head of the National Bureau of Statistics, said China's demand for infrastructure investment was still high in areas such as rural development and urban transport systems, but the country still lagged behind many developed countries in terms of infrastructure per capita.

Ning expects stronger investment data in 2019 as the country's policies come through.

Stabilizing employment

The government has vowed to put stable employment in a more prominent position and continue to prioritize creating jobs and implementing a more proactive employment policy.

Companies without or with few layoffs can get a 50-percent refund of their unemployment insurance premiums paid in the past year. More government-subsidized training will be conducted to equip the jobless with vocational skills, while employment services and supportive policies will be given to laid-off workers.

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