Economy

Small and Micro Businesses Prop up Chinas Economy

A report on the development of Chinas small and micro firms， released by the State Administration for Industry and Commerce， claims that the broad grouping of small and micro enterprises is now a major pillar of Chinas economy and the largest job provider for new entrants into its labor market， thus constituting a foundation for Chinas stable and sustainable economic development.

Nowadays， roughly 70 percent of urban residents and over 80 percent of rural migrant workers are employed in small and micro enterprises， making such firms the countrys major job provider. Therefore， extending support to small and micro firms will create more employment， helping to fuel the countrys economy and improve peoples livelihoods.

At the executive meeting of the State Council on April 2， Premier Li Keqiang proposed that the policy of halving the corporate income tax for small and micro businesses be extended to the end of 2016， so significantly raising the taxable income above the current level of RMB 60，000. In 2011， the central government introduced a policy whereby the business income tax of any company whose annual taxable income is under RMB 60，000 would be halved during 2012-2015.

Deepened Reform of Railway Investment and Financing Systems

At its executive meeting on April 2， the State Council decided on policy measures to deepen reform of railway investment and financing systems and accelerate railway construction. The main policy measures include： first， a railway development fund will be set up， open to social investment， with the funds value expected to reach RMB 200 to 300 billion； second， the varieties and methods of issuance of railway construction bonds will be innovated， and a favorable income tax policy on railway bond investment will be implemented， with RMB 150 billion in railway bonds to be issued this year； third， the government will encourage banks to finance railway construction， in an attempt to expand the investment volume of social capital in this field； fourth， central finance will subsidize the railway sector in its public welfare transportation tasks， while a standard subsidy system is expected to be established； fifth， the central government will pay more attention to planning and coordination to facilitate projects under construction and accelerate preliminary work of planned projects， so as to ensure the stable growth of railway investment and speed up railway construction.

China Bags World Top Equipment Manufacturing Output Value

The national work conference of the equipment manufacturing industry， held in early April， released data showing that Chinas equipment manufacturing output exceeded RMB 20 trillion in 2013， accounting for over one third of global output， firmly securing the worlds number one position.

According to Su Bo， viceminister of Industry and Information Technology， in terms of output of most equipment products， China is top in the world. Chinas emerging industries， such as intelligent manufacturing equipment， marine engineering equipment， advanced railway transportation equipment and new-energy automobiles， have made major headway. The proportion of Chinas high-end equipment manufacturing output to its total equipment manufacturing output has surpassed 10 percent.

Although it has become a major equipment manufacturing country， compared to advanced countries in the field， China still has a quite wide gap to close. The current value-added rate of Chinas equipment manufacturing industry is only 26 percent， six to eight percentage points lower than average levels of the developed world.

Legislation on Environmental Protection Tax

Legislative work on an environmental protection tax has officially commenced in China. As of now， the Legislative Affairs Office of the State Council has completed the revision of the submitted draft on the tax. Experts point out that industries with seriously excess production capacity， such as the steel， cement， sheet glass， electrolytic aluminum and coal chemical industries， will be affected once the environmental protection tax is levied. A State Administration of Taxation official responsible for policies and regulations emphasizes that transforming environmental protection fees into tax is a systematic project involving many departments. In the future governmental departments， including those of finance， taxation and environmental protection， will strengthen coordination in an endeavor to accelerate legislation of the environmental protection tax and prepare for feeto-tax transformation.