Policies boost entrepreneurship and keep economy ticking over

Tax cuts will be like a shot in arm for corporate China, fueling economic growth as well as forcing the government to keep a tight grip on spending.

Vice-Minister of Finance Shi Yaobin outlined the long-term objectives of easing the VAT burden on companies, pointing out that Beijing could cope with reduced tax revenue.

"The policy reforms on valued added tax (or VAT) will help promote entrepreneurship by lowering the tax burden," Shi said last week after data showed that fiscal spending slowed in May compared to the previous month.