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China’s Finance Minister Pledges Tax Cuts, Fiscal Discipline


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The ministry must shoulder responsibility for the sustainable and healthy development of the economy, as well as maintain social stability, Liu Kun said


China's Finance Minister Liu Kun
China's Finance Minister Liu Kun said the transfer payments from the central to local governments will continue to favour difficult areas and less developed regions. Photo: Reuters.

 

China’s finance minister vowed to cut corporate tax rates, target spending and tighten fiscal discipline this year as part of efforts to stabilise the economy ahead of the ruling Communist Party’s congress this year.

The ministry must raise its political standing and shoulder responsibility for the sustainable and healthy development of the economy, as well as maintaining social stability, Liu Kun, said in an article published by the People’s Daily on Friday.

The party congress will be held in autumn when Chinese leader Xi Jinping is widely expected to be confirmed for a third five-year term.

China should allocate the proceeds from special-purchase local government bond sales to ensure the construction of key projects, Liu said.

He also called on party and government agencies to tighten their belts, so that more fiscal resources can be directed towards improving people’s livelihood and invigorating the economy.

China should also make fiscal spending early during the year, so as to bolster support to market entities, while stimulating consumption, Liu said in the article.

He added that the government would continue to control debt risks.

 

  • Reuters, with additional editing by George Russell

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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