Chinese business confidence in future production and operation is getting stronger, Wang Jun, head of the State Taxation Administration said at a press conference on Thursday.

In the first quarter, a total of 3.434 million new business entities were established nationwide, up 7.2 percent from last year.

The sales of service industries such as accommodation and catering; cultural, sports and entertainment; and residential services rebounded substantially in the first quarter, increasing by 22.8 percent, 13.7 percent, and 9.4 percent respectively year on year, and exceeding the level in 2019 before the pandemic.

Notably, housing consumption showed signs of recovery. The sales revenue of the real estate industry in January and February shifted positive, an increase of 2.3 percent year on year.

The finance and taxation departments have introduced preferential tax and fee policies. The additional tax and fee reductions are estimated at 1.2 trillion yuan ($ 0.17 trillion) annually, said Wang Daoshu, deputy head of the State Administration of Taxation.

Together with the continued tax refund policy, it is estimated that the tax and fee burden will be reduced by more than 1.8 trillion yuan for business entities throughout the year, he added.

Furthermore, the additional deduction ratio for the R&D Super Deduction incentive will be uniformly increased from 75 percent to 100 percent and implemented as an institutional arrangement in the long term to create a favorable tax environment for investment in innovation.

Despite the improving economic conditions, the authorities should stay vigilant against uncertainties and instabilities at home and abroad, and further enhance the endogenous driving force toward high-quality development, Wang added.

(Cover image via CFP)