Tax cuts are a priority to inject more vitality into the economy

AT A RECENT FACE-TO-FACE MEETING between entrepreneurs and central government officials in Beijing, Jiang Xipei, chairman of Far East Holding Group, a technology company headquartered in Yixing, East China's Jiangsu province, said that the biggest burden on enterprises is the institutional costs they have to bear, so the government must ease the tax and fee burden on enterprises. Beijing News comments:

Jiang's brief remarks to the decision-makers in the State Council, China's Cabinet, have resonated with many of his peers, which has led to a public debate on the direction of the government's macroeconomic policies - support large-scale infrastructure construction or cut tax to relieve the real economy's operating burden.

In fact, both policies are needed in the current circumstances. But reducing the tax and fees paid by enterprises should be a priority, because this would effectively stimulate their vitality, lessen fears of inflation and contribute to a healthy business environment. More important, China still has considerable capacity and space in which to lower tax.