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PR Newswire
27-07-2013, 05:27 PM
To share a comprehensive comment on China's investment... An article worth a read IMO...
Weekend Comment Jul 26: China's next investment wave
THE CHINESE GOVERNMENT is working hard to arrest the slide in its economic growth. HSBC’s Flash China Manufacturing PMI for the month of July fell to an 11-month low, signalling marked downside pressures to growth. On June 24, its State Council announced three new measures: tax cuts for small enterprises, support for international trade and investments into the nation’s railway infrastructure. This means there may be benefits for the locally-listed China companies or so-called S-chips.
From Aug 1, the government will temporarily waive value added and business tax for companies with monthly sales of less than RMB20,000 ($4,117). It will also study the possibility of long-term tax cut measures. The State Council estimates that more than six million micro- and small-enterprises (MSEs) will benefit from this policy. As current tax rates for MSEs are about 3%, this tax cut will cost about RMB20 billion a year, so the direct impact on the Chinese economy should be quite small, says a Bank of America Merrill Lynch (BAML) report. However, the report goes on to add that labour-intensive MSEs have complained extensively about their high tax burdens. “So we believe that this tax cut will mainly serve to support employment and boost confidence,” it adds.
To support trade, and in particular exports, which have slumped in recent months, the State Council has announced several new initiatives. It is quickening reforms on simplifying customs procedures for exports and slashing custom-related fees. It will, for instance, temporarily waive examination fees for exports. Financial institutions are also being encouraged to support profitable exporters with orders. The government is also working to cut export taxes to zero for service exports. And, it intends to maintain the RMB exchange rate stability at an “appropriate equilibrium level”. BAML believes that this means that the People’s Bank of China, the country’s central bank, won't allow the RMB to appreciate from its current levels, though it could also prevent depreciation for fear of capital outflows or a row with the US
http://www.theedgesingapore.com/blog-hea...-wave.html
Weekend Comment Jul 26: China's next investment wave
THE CHINESE GOVERNMENT is working hard to arrest the slide in its economic growth. HSBC’s Flash China Manufacturing PMI for the month of July fell to an 11-month low, signalling marked downside pressures to growth. On June 24, its State Council announced three new measures: tax cuts for small enterprises, support for international trade and investments into the nation’s railway infrastructure. This means there may be benefits for the locally-listed China companies or so-called S-chips.
From Aug 1, the government will temporarily waive value added and business tax for companies with monthly sales of less than RMB20,000 ($4,117). It will also study the possibility of long-term tax cut measures. The State Council estimates that more than six million micro- and small-enterprises (MSEs) will benefit from this policy. As current tax rates for MSEs are about 3%, this tax cut will cost about RMB20 billion a year, so the direct impact on the Chinese economy should be quite small, says a Bank of America Merrill Lynch (BAML) report. However, the report goes on to add that labour-intensive MSEs have complained extensively about their high tax burdens. “So we believe that this tax cut will mainly serve to support employment and boost confidence,” it adds.
To support trade, and in particular exports, which have slumped in recent months, the State Council has announced several new initiatives. It is quickening reforms on simplifying customs procedures for exports and slashing custom-related fees. It will, for instance, temporarily waive examination fees for exports. Financial institutions are also being encouraged to support profitable exporters with orders. The government is also working to cut export taxes to zero for service exports. And, it intends to maintain the RMB exchange rate stability at an “appropriate equilibrium level”. BAML believes that this means that the People’s Bank of China, the country’s central bank, won't allow the RMB to appreciate from its current levels, though it could also prevent depreciation for fear of capital outflows or a row with the US
http://www.theedgesingapore.com/blog-hea...-wave.html
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