China Would Take New Measurements To Help The Economy
China will expand tax credit rebates, defer social security payments and loan repayments, launch new investment projects, and take other measures to help the economy.
Chinese officials have committed to providing support for the world’s second-largest economy, which has been battered by COVID-19 outbreaks, which have caused supply chain disruptions and harmed output and consumption. China plans to resume regular economic operations with a package of focused, aggressive, and effective measures, according to the cabinet. “At this time, the negative pressure on the economy is increasing, and many market entities are finding it very tough,” the cabinet said during a regular meeting.
China To Rescue its Economy
Many private-sector experts forecast the GDP to contract this quarter from a year ago, compared to 4.8 percent growth in the first quarter. The government would grant tax credit rebates to additional industries, as well as raise yearly tax cuts by more than 140 billion yuan ($21 billion) to 2.64 trillion yuan, according to the cabinet. China would also lower some passenger automobile purchase taxes by 60 billion yuan. Small enterprises, individuals, and other severely affected sectors will have their social security payments, including pension insurance premium payments, postponed until the end of the year, according to the cabinet.
Deferred payments are likely to total 320 billion yuan this year, according to the report. The cabinet said that China will provide 150 billion yuan in emergency loans to the troubled aviation industry, as well as assist the sector’s plan to sell 200 billion yuan in bonds, in addition to a plan to issue 300 billion yuan in bonds to fund railway development. China dropped its benchmark mortgage reference rate by an unexpectedly large margin this week, the second cut this year as Beijing tries to resuscitate the faltering housing market and prop up the economy. Other stimulus measures, such as the potential issue of special treasury bonds to cover fiscal outlays, and more measures to boost consumption are expected in the second half of the year, according to analysts.
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