At the State Council executive meeting on May 16, Premier Li Keqiang pledged to cut costs in the logistics industry and improve its efficiency.

He said the government has taken effective measures in recent years to cut logistics costs. Data show that in 2017, social logistics costs accounted for 14.6 percent of GDP, down by 3.4 percent from 2012, falling five years in a row.

“There is still room for reform,” the Premier said. “During my local visits, I found that the number of permits for passenger vehicles is still too high.”

Measures were issued at the meeting. From May 1, 2018, to Dec 31, 2019, the land use tax for warehouses of logistics enterprises will be cut by 50 percent. The vehicle purchase tax for trailers will be cut, also by a half, from July 1, 2018, to June 30, 2021.

The annual verification, examination and exhaust gas inspection for trucks will be consolidated. Getting permits for them will be simplified. The certificate for trucks under 4.5 metric tons will be canceled.

The government will also try to cancel toll stations at provincial boundaries on highways and simplify procedures for logistics enterprises to set up branches.

Earlier this year, a policy was issued to adjust the value-added tax, which resulted in the reduction of railway freight. With these measures taken this year, logistics costs are expected to be cut by over 12 billion yuan.

“Besides cutting transportation costs, we should also develop a combined transport by highway, railway and waterway to improve logistics efficiency,” the Premier said.

At the meeting, he urged further streamlining administration, delegating power and cutting taxes and institutional trade costs.