BEIJING - The Chinese government has planned a basket of favorable measures for companies in the real economy to cut costs as part of efforts to bolster lackluster economic growth, an official document said.
The measures include lower tax burdens, cheap financing and reduced red tape, as well as more affordable land use, energy consumption and logistics, according to a work plan released on Monday by the State Council.
The government expects the measures to improve the business environment, facilitate industrial upgrades and enhance corporate competitiveness.
The value added tax will continue to be promoted nationwide to replace business tax, which is expected to save enterprises more than 500 billion yuan (about $75 billion) each year, said the document. R&D tax credits will also be implemented, and more administrative fees will be canceled.
To lower funding costs, China will maintain abundant liquidity and increase credit support for small firms, agriculture and other money-starved sectors. Policy support will continue for private banks and small and medium-sized institutions, including financial leasing companies and village banks.
China will boost equity financing and ensure the reasonable expansion of the bond market to meet increasing financing demand, especially for small firms. Businesses with good credit will be encouraged to issue overseas bonds, and the Chinese currency, the yuan, will be promoted in cross-border transactions to cut costs.
The government will create a sound business environment, partly by removing regional barriers and implementing a national negative list for market access. China will further reduce the burden on businesses by cutting their payments to social security funds. The required contribution rates for pension insurance, unemployment insurance and housing provident funds will be lowered.
The government will relax price controls on the energy sector, reduce industrial electricity prices and lower land use prices.
Logistics costs will also be lowered. The proportion of logistics costs in total value of logistics goods will be reduced to 4.4 percent from the current 4.9 percent, while the ratio for businesses will be cut to 8.3 percent from the current 9.3 percent.
China will propel asset securitization and pilot venture loans to support high-tech startups. Businesses will be helped to improve capital turnover and pay debts to reduce the debt burden on the economy.
The government will also guide businesses to adopt new technology and improve management to reduce costs.
Policy makers aim to achieve major progress in about three years, which means a marked increase in corporate profitability.
China has rolled out an array of policies, including tax breaks and easier market access, to help companies weather the ongoing economic slowdown.
The country's economic growth stayed at 6.7 percent in the second quarter, the lowest level since the 2009 global financial crisis.