Key Fiscal Goals for 2018 Outlined

Key Fiscal Goals for 2018 Outlined

China Banking and Insurance Regulatory Commission， the countrys newly merged banking and insurance regulator， has outlined major tasks for financial work in 2018， with their top priority aiming to prevent and dissolve risks as the countrys new economic team promised better coordination in this area.

During a meeting， Guo Shuqing， head of the new body， pledged to steadily bring down corporate leverage， dismantle shadow banking， and crack down on illegal financial activities to forestall risks. It will also work to rein in possible bubbles in the property market and help local governments clean up implicit debt. To support the building of a modernized economic system， the regulator will work with local governments and businesses to promote structural adjustments and facilitate business mergers and restructuring. More support will be given to national strategies such as rural revitalization and regional coordination， while financing services for small and micro firms will be further improved.

The meeting also announced more reforms and opening-up in the banking and insurance sectors to bring out market vitality.

Software Industry Boosts Economic Growth

The business revenue of Chinas software industry stood at RMB 5.5 trillion （about US$873 billion） in 2017， 2.2 times that of 2012， according to the Ministry of Industry and Information Technology （MIIT）.

Xie Shaofeng， an official with the MIIT， said at a press conference in April for the upcoming China International Software Expo that total profits of Chinas software industry reached RMB 702 billion last year. The software industry is now supporting the expansion and upgrading of information consumption and providing a stronger impetus to the countrys economic growth， Xie said.

The 22nd China International Software Expo is set to open in Beijing on June 29 this year. It will introduce the latest innovations of the industry， as well as cutting-edge technologies and products to the public， such as those related to artificial intelligence， blockchain， and open source software. The expo will promote innovative transaction services to strengthen protection and use of intellectual property rights and help increase transparency and combat copyright infringement in the software industry.

Growing Toy Market

Chinas domestic toy sales exceeded RMB 64.6 billion（about US $10 billion） in 2017， an increase of 16.2 percent yearon-year， according to a report published by the China Toy & Juvenile Products Association in March. Toy purchases per child below 12 years old averaged RMB 276， up 14.5 percent yearon-year， said the report.

In 2017， the domestic sales of childrens products also saw robust growth. The sales of strollers， car seats， and feeding bottles reached more than RMB 12.4 billion， RMB 4.3 billion， and RMB 4.9 billion， up 16.8 percent， 24.1 percent， and 20 percent year-on-year respectively. Liang Mei， head of the association， said the fast sales growth shows improved competitiveness of Chinese manufacturers through industrial upgrading and upgraded domestic consumption.

China is the worlds biggest toy producer and exporter. Over 70 percent of toys around the globe are produced in China.

New Tax Cuts to Boost High-quality Development

China will cut value-added tax （VAT） rate as part of a tax reduction package equivalent to RMB 400 billion （about US $63 billion） this year. The decision was made at a State Council executive meeting chaired by Premier Li Keqiang in March. It is expected to boost high-quality development.

Starting from May 1， the tax rate is lowered from 17 percent to 16 percent for manufacturing， and from 11 percent to 10 percent for transportation， construction， basic telecommunication services， and farm produce.

The meeting also decided to unify the standard for smallscale taxpayers， as it raised the threshold of taxable annual sales volume for industrial and commercial enterprises from RMB 500，000 and RMB 800，000 to RMB 5 million. Enterprises registered as general taxpayers will be allowed to switch their status to small-scale taxpayers within a given time. As part of the tax cut package， eligible enterprises in advanced manufacturing， modern services， and power grid industries shall receive a lumpsum refund for their input VAT payments yet to be deducted.

Li said this round of tax cuts will apply to all manufacturing companies. All businesses registered in China， be they joint ventures or wholly foreignowned companies， will be treated equally.