BEIJING (Reuters) - China will scrap taxes for small firms, offer more help for ailing exporters and widen funding channels to speed railway investment, the cabinet said on Wednesday, in Beijing’s latest efforts to boost the slowing economy.
The world’s No 2 economy has slowed in nine of the past 10 quarters and while the government has said it will tolerate slower growth to push reform, it has begun fine-tuning policy in recent weeks to stop the economy from slipping too far.
State radio and TV quoted the State Council, or China’s cabinet, as saying Beijing would exempt more than 6 million small firms with monthly sales of less than 20,000 yuan ($3,300) from business and value-added taxes. Such firms collectively employ several tens of millions of workers.
The cabinet also said later on its website that banks should step up support for exporters, while the government would simplify customs clearance procedures, cut administrative fees and provide zero tariffs for exporters in the services sector.
China will also increase interest rate discounts on loans to benefit importers, while “keeping the yuan basically stable at a reasonably balanced level,” the cabinet decided in a regular meeting chaired by Premier Li Keqiang.
“The economy is still running in a reasonable range. We must look at now and beyond to let restructuring and reform play an active role in stabilizing growth,” the cabinet said.
The cabinet also said China would diversify funding channels to build railways, particularly in the western and poor regions.
The meeting decided to set up a railway development fund, with initial money from the central government but also trying to attract contributions from private investors.
China should be innovative in bond issuance to support rail construction, the government said.
“We must speed up preparation work to ensure a timely start to key projects in the 12th five-year plan, and push them ahead at a reasonable pace, while ensuring quality,” it added.
Earlier on Wednesday, China’s top foreign exchange regulator said it would simplify foreign exchange rules for the services industry.
Reporting by Langi Chiang and Jonathan Standing; Editing by Clarence Fernandez