China adopts more proactive fiscal policy

World
Europe

01:07

Recent data shows China has continued to implement the proactive fiscal policy which government began following in 1998, mainly to cope with the impact of the Asian financial crisis and to expand domestic demand.

The move sparked a wave of re-energized economic growths, and in recent years, the government has rolled out a string of new measures to keep things moving in a positive direction.

In 2015, China reduced import tax rates for consumer goods to boost domestic consumption. The average reduction was more than 50 percent.

Last year, China unleashed a new round of import tariff cuts on 187 categories of goods, amid complaints from other nations about trade barriers.

Now, small and micro businesses are set to enjoy a value-added tax exemption on interest income from loans of up to 10 million yuan (about 1.44 million US dollars) and the concession will last till the end of 2020.

China's Ministry of Finance says Chinese companies can expect to save a total of 1.3 trillion yuan in administrative fees and taxes this year.

In May, the tax rate was lowered for firms involved in manufacturing, transport, construction, telecom, and agriculture.

In addition, China has decided to raise the deduction baseline for personal income tax from the current 3,500 yuan (about 512 US dollars) to 5,000 yuan (about 721 US dollars) per month, which means people earning less than 60,000 yuan (about 8,656 US dollars) per year will be exempt from paying income tax.