Quick look

Business tax cuts likely

The three-day annual Central Economic Work Conference, which took place last week in Beijing, said the Chinese government is "very likely" to initiate cuts in business taxes to add impetus to the slowing economy and ensure a gross domestic product growth of at least 8 percent next year. The government may soon cut business taxes for enterprises by 1 percentage point from the current 5 percent, a source close to policymakers told China Daily last week. That would amount to 120 billion yuan worth of tax cuts given annual business tax revenues of more than 600 billion yuan last year.

Exports, FDI fall

Exports and foreign direct investment (FDI) both fell in November because of shrinking demand overseas, signalling fresh signs of economic weakness and prompting calls for more measures to bolster the economy. Exports dropped 2.2 percent to $114.99 billion last month, the first monthly decline in seven years, Customs authorities said last week. FDI fell 36.52 percent year-on-year to $5.3 billion, the Ministry of Commerce said. But the country's trade surplus soared to a record $40.09 billion in November despite a fall in exports because imports fell, too, by 17.9 percent year-on-year after having risen 15.6 percent in October.

China jobless warning

Zheng Gongcheng, a member of the National People's Congress Standing Committee, said last week China's jobless rate could rise next year from the existing 4 percent because of massive job cuts. Social stability could be threatened if the registered urban unemployment rate rises above 5 percent next year, he warned.

New plane buys stopped

The Civil Aviation Administration of China asked airlines to suspend purchase of new planes from foreign manufacturers in order to cut operation costs and maintain a balance between demand and supply. The global financial crisis has led to a drop in the number of domestic and overseas travelers and largely reduced the need for new aircraft, causing a loss to the aviation industry.

Travel agency deposits

The China National Tourism Administration will return up to 70 percent of the deposits of travel agencies to help them cope with the fall in the number of tourists because of the global financial crisis. Inbound travel firms usually have to deposit 100,000 yuan with the administration, while the amount for outbound agencies is 1.6 million yuan. The administration uses the deposits to compensate tourists who suffer losses or meet with accidents during tours because of travel agencies faults.

Safe food campaign

A four-month nationwide campaign will ensure all food products are free of non-edible substances and excessive levels of additives, the Ministry of Health said last week. The ministry said the campaign would be divided into three phases:

1) From last Wednesday to January 10, companies will be asked to conduct self-examination and correction.

2) From January 11 to March 10, law enforcement officers will raid high-risk food producers or regions, and intensify random checks on markets.

3) From March 11 to April 10, the focus will be on illegal food-additive producers and cutting off the supply of high-risk non-food substances.

(China Daily 12/15/2008 page2)