China will make pre-emp­tive pol­icy changes to spur growth, says Premier

The Pak Banker - - FRONT PAGE -

BEI­JING: China, which ex­panded at its slow­est pace in 25 years last year, will make pre-emp­tive pol­icy changes to sup­port growth and ward off fi­nan­cial risk, Premier Li Ke­qiang said in re­marks pub­lished on Fri­day. The govern­ment would make sure it achieved its main eco­nomic de­vel­op­ment tar­gets this year, state ra­dio quoted Li as telling a reg­u­lar cab­i­net meet­ing. Li said the govern­ment would closely watch the eco­nomic sit­u­a­tion at home and abroad. The govern­ment has set a growth tar­get of 6.5 per­cent to 7 per­cent for 2016. The world's se­cond-largest econ­omy ex­panded 6.9 per­cent in 2015, its slow­est pace in a quar­ter of a cen­tury. The govern­ment would "make good use of fis­cal and mon­e­tary pol­icy tools to strengthen pre­emp­tive and timely fine-tun­ing, pre­pare pol­icy re­serves and ef­fec­tively guard against var­i­ous risks", Li said. It would al­lo­cate fis­cal funds and launch ma­jor in­vest­ment projects quickly this year and make sure planned pol­icy and re­form mea­sures were im­ple­mented. China's cen­tral bank won't re­sort to ex­ces­sive stim­u­lus to bol­ster growth but would keep a flex­i­ble stance in the event of an eco­nomic shock - do­mes­tic or global, Gov­er­nor Zhou Xiaochuan said ear­lier. Li also said that China would ex­pand tax re­forms to re­place a busi­ness tax with a val­ued-added tax in the con­struc­tion, prop­erty and fi­nan­cial ser­vices sec­tors, ef­fec­tive from May 1. The VAT re­form, which was launched in 2012 as a trial pro­gramme, has been ap­plied to rail­way trans­port, postal ser­vices, telecom­mu­ni­ca­tions and some ser­vice sec­tors. The tax re­forms will cut firms' tax bur­dens by more than 500 bil­lion yuan (£53.2 bil­lion) this year.

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