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Govts & Policies

Tax breaks to be extended

China will extend tax breaks to outsourcing service providers in more cities, as part of attempts to boost service trade, the Ministry of Finance said on Monday. Service firms with advanced technology in 10 cities, including Shenyang, Urumqi, Qingdao and Ningbo, will have their corporate income tax lowered from 25 percent to 15 percent, from 2016 to 2018, the ministry said in a statement. Meanwhile, company staff education expenses will be tax-deductible as long as they account for no more than 8 percent of total wages, the statement said. The move is additional to existing tax breaks that apply to similar companies in 21 other cities.

Emergency plan for debt risks

Following rising concern over local government debt, authorities on Monday issued a four-grade emergency that could lead to fiscal rebalancing. With Grade One being the most serious, the classification system involves examining the nature and impact of any incident, according to the State Council announcement. A city or county government will fiscally rebalance its books if its annual interest payments on general debt are 10 percent more than its public spending budget, or if interest on special debts is 10 percent more than its government-funded budget.

Capital flight pressure increased

China's central bank continued to see net foreign exchange sales in October, as a weakening yuan increased capital flight pressure, data showed on Monday. The People's Bank of China said its yuan funds outstanding for foreign exchange fell 267.9 billion yuan ($39.2 billion) in October to 22.6 trillion yuan. It was a milder drop than the 337.5-billion-yuan decrease in September, but marked the 12th consecutive month of declines.

Deal on organic food certification

China and New Zealand signed an agreement on Monday to mutually recognize organic food with official certification labels, to facilitate organic food development and trade. China's Certification and Accreditation Administration and New Zealand's Ministry of Primary Industries agreed to mutually recognize each other's certification for organic food imports. This is the first mutual recognition agreement for organic food certification China has signed with a foreign country. China mainly exports coffee, frozen vegetables, and pet food to New Zealand and imports dairy products, meat and fruit from the country.

Companies & Markets

Didi, Avis Budget signs partnership

Local ride-hailing giant Didi Chuxing said it had signed strategic partnership agreement with leading US rental company Avis Budget Group Inc. The partnership will provide Didi's over 300 million registered Chinese users with easy access to car rental services, from the affiliate Avis Car Rental and Budget Car Rental, in 175 countries overseas. According to the agreement, Chinese users will be able to book Avis Budget's car rental services using their Didi Chuxing smartphone app, from rental stores downtown to airports abroad. Fu Qiang, senior vice-president of Didi Chuxing, said the new partnership was a big step forward for the company to become international.

Better connected world sought

Public and private sectors across the ICT (information and communications technologies) industry have gathered in Bangkok to talk about collaboration, while China's Huawei asked for a better connected world, during a conference run by the International Telecommunication Union. ITU Telecom World 2016, which opened on Monday, runs to Friday. In the forum section, participants expressed their opinions about ICT industry development. "Within the ICT industry, it is the innovative small and medium-sized tech enterprises that are key to ... job creation and to the technological innovation that is taking the industry forward, said Zhao Houlin, secretary-general of the ITU.

Temasek cuts stake in Alibaba

Temasek Holdings Pte reduced its stake in Alibaba Group Holding Ltd in the third quarter - as shares of China's biggest online retailer rallied - while emerging as a shareholder of software maker Dell Technologies Inc. The Singapore state-owned company sold 14.5 million American Depositary Receipts, leaving it with 39.6 million at the end of September, worth $4.2 billion, according to a filing with the US Securities and Exchange Commission on Monday. Alibaba gained 33 percent in the three months through September.

Around The World

Ukraine's GDP up in third quarter

Ukraine's gross domestic product rose by 1.8 percent year-on-year in the third quarter of 2016, compared with the 1.4 percent gain in the second quarter, official figures showed, the State Statistic Service said in a statement. Local analysts affirm that the GDP performance strengthened due to the normalization of the political situation, which resulted in improved domestic consumption, international financial support that helped stabilize the banking system, and a more favorable situation in export markets.

Services sector in NZ rebounds

A boom in tourism and rising domestic spending in October helped drive up growth in New Zealand's services sector, according to the country's services index which was released on Tuesday. The BNZ-Business New Zealand PSI rose 2.1 points to 56.3 in October, on a scale where above 50 represents expansion and below 50 contraction. Business New Zealand Chief Executive Kirk Hope said the rebound after a drop in expansion during September was welcome, with all subindices showing stronger results. "It was welcoming to see the key indicators of activity/sales (58.4) and new orders/business (56.3) showing stronger expansion, with the former at its second highest level for the last five months," Hope said in a statement.

Albania halves royalty mining tax

The Albanian government has decided to cut the royalty mining tax on processed metallic minerals from 6 percent to 3 percent, to provide more stimulus for the mineral processing industry, sources from the Albanian energy ministry said on Monday. Besides metallic minerals, the government is also planning to create tax incentives for bitumen, as there is a high demand for such products in the international markets, the sources said. According to energy ministry experts such incentives, included in the 2017 fiscal package, aim at promoting the domestic processing industry and the economy and employment in Albania.

Vietnam's cashew exports on the rise

Vietnam's cashew exports are expected to reach a record high of $3 billion in 2016, according to the Ministry of Industry and Trade on Monday. In the first 10 months of the year, the country exported 290,000 metric tons of cashew worth $2.32 billion, a year-on-year increase of 5.5 percent in volume and 16.4 percent in value, the ministry added. Vietnam currently accounts for half of the world's cashew exports and has been the leading exporter for the last 10 years.

Singapore's retail sales up 2 percent

Singapore's retail sales increased 2.0 percent in September on a year-on-year basis, mainly due to higher sales of motor vehicles, said the Department of Statistics Singapore on Tuesday. Retail sales dropped 1.9 percent year-on-year excluding motor vehicles, SingStat said in the report. The total retail sales value in September was estimated at S$3.5 billion ($2.48 billion), higher than the S$3.4 billion in the same period last year. While on a month-on-month basis, retail sales decreased by 0.7 percent in September. Excluding motor vehicles, retail sales edged up by 0.7 percent.

(China Daily 11/16/2016 page14)