Reuters | Jan 12, 2019 04:04AM ET
SHANGHAI (Reuters) - China's plans for tax cuts targeting smaller companies will help to support employment and economic stability, and will expand the country's tax base over the long term, Premier Li Keqiang was quoted as saying on Saturday.
"Implementing tax cuts for small and micro enterprises is mainly to support employment," Li said in comments posted on the Chinese government's website.
Developing and strengthening small companies is linked to economic stability and stable employment, he said.
"Looking at the long term, this will continue to expand the tax base, conserve tax resources and ultimately achieve wins for mass employment, corporate profits and fiscal revenues," he was quoted as saying, referring to the corporate tax cuts.
Li's comments come amid growing official concern over China's slowing economic growth and its impact on the labor market.
Chinese authorities plan to set a lower economic growth target of 6 to 6.5 percent in 2019, compared with "around" 6.5 percent in 2018, sources told Reuters, as weakening domestic demand and a damaging trade war with the United States drag on business activity and consumer confidence.
Analysts expect that China's economy grew around 6.6 percent last year, its slowest pace since 1990, and it is expected to cool further in coming months before a slew of support measures start to kick in.
"The bottom line for the policymakers is social stability, which is crucially tied to the unemployment rate and job creation," analysts at BoAML said in a recent note. "With U.S.-China trade risks still looming large, we believe policymakers would not hesitate to take pre-emptive measures to stabilize expectations on job stability."
More growth boosting steps are expected this year as policymakers seek to avert the risk of a sharper slowdown.
China's State Council, or cabinet, said on Jan. 9 that it would further reduce taxes for smaller companies. On Friday, Finance Minister Liu Kun said authorities would step up tax and fee cuts to lower corporate burdens.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.