Tax and fee cuts should be fully implemented

The government must maintain a tight budget and make sure that tax-and fee-reduction policies are fully implemented, the State Council decided at an executive meeting on Oct 16.

A statement released after the meeting said tax and fee cuts exceeded 1.5 trillion yuan ($212.03 billion) in the first eight months of the year.

Tax and fee cuts have eased the burden on enterprises, increased residents' incomes and added jobs, which effectively stimulated market vitality, it said, and the cuts also played a significant role in counteracting downward pressure, stabilizing the country's economy and maintaining reasonable economic growth.

It is estimated that total tax and fee reductions will exceed 2 trillion yuan by the end of this year, the statement said.

The Cabinet called for efforts to further implement related policies, and study and solve problems faced by enterprises in a timely manner.

As a result, the tax burden on major industries such as manufacturing should be significantly reduced, the tax burden on the construction and transportation industries should be eased and the tax burden on other industries should not be increased, it said.

The collection of fees from enterprises that violate laws and regulations will be subject to further regulation, according to the statement.

The meeting decided that governments at all levels should strengthen their budget management by maintaining a tight budget and strictly controlling regular expenditures.

Provincial governments are responsible for supporting grassroots governments that are experiencing fiscal difficulties to guarantee their salaries, operation and basic livelihood needs, it said.

The Cabinet also called for further study of measures designed to promote reform, stimulate development and increase employment, with a focus on encouraging entrepreneurship and innovation.

It also required efforts to study preferential policies to increase tax deductions in key industries such as manufacturing.

Amendments further open up finance sector

The State Council has amended some provisions in regulations that are related to the administration of foreign-funded insurance companies and banks in order to expand the opening-up of China's finance sector.

A State Council decree published on Oct 15 said amendments to the regulations on the administration of foreign-funded insurance companies and foreign-funded banks came into effect that day.

A new article in the regulations on the administration of foreign-funded insurance companies－article 40－says that foreign insurance group companies are allowed to establish foreign-invested insurance companies in China.

Another new article－41－stipulates that overseas financial institutions are allowed to become shareholders of foreign-funded insurance companies.

A revised article 11 in the regulations on the administration of foreign-funded banks requires the foreign stakeholders of joint-venture banks to be financial institutions.

The only or major stakeholder should be a commercial bank and its capital adequacy ratio should meet the requirements specified by the financial supervisory authorities, it said.

According to a revised article 25 in the regulations on the administration of foreign-funded banks foreign banks are allowed to set up foreign-funded banks and foreign bank branches in China at the same time.

They are also allowed to establish joint-venture banks and foreign bank branches at the same time.