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MNI BRIEF: China Plans Larger Tax Cuts and Spending: Minister

MNI (Singapore)
BEIJING (MNI)

China will "properly set the budget deficit-to-GDP ratio" to expand fiscal spending, including larger-scale tax and fee cuts and increased transfer payments to local governments, so to counter growing downward pressure, said Minister of Finance Liu Kun at a briefing on Tuesday.

The cuts will be larger than the CNY1.1 trillion in 2021, said Vice Finance Minister Xu Hongcai. The central government will significantly increase the transfer payments, mainly to difficult, underdeveloped areas, and to offset the impact of tax and fee cuts, he said, adding targets will be announced during the National People’s Congress starting March 5.

“There are many new projects under construction, using the funds of local government special bonds,” Xu said. In January, CNY484.4 billion of special bonds were issued for transportation, municipal facilities, industrial parks and affordable housing projects, significantly faster than the same period last year, said Xu.

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