MNI China Press Digest Jan 10: Yuan, Unemployment, Tax Relief

Highlights from Chinese press reports on Tuesday:

• The yuan’s new year rally has set the foundation for maintaining a stable exchange rate in 2023, but smoothing out Covid-19 disruptions and boosting market confidence are needed keep momentum going, according to Guan Tao, a former official at the State Administration of Foreign Exchange. Guan said the recent strengthening of the yuan was due to the optimisation of pandemic controls, which had raised growth prospects and led to increased domestic and foreign appetite for yuan assets, with northbound capital flows increasing. A record foreign trade surplus and strong domestic tourism data also added to the yuan's strength, he said. Guan’s comments were reported by Yicai.com.
• China’s economy will continue to recover in 2023, but structural imbalances will continue to put pressure on unemployment, according to Wang Xiaoping, Minister of Human Resources and Social Security. With a record 11.58 million students forecast to graduate in 2023, policy should focus on supporting new and recent university graduates, through measures such as providing social security and training subsidies. Authorities should continue to implement macro and fiscal policy to support stable employment. Wang's comments were reported by the Shanghai Securities News.
• Authorities in China have announced VAT reduction and exemption policies to support small scale businesses, according to Yicai.com. The Ministry of Finance State Administration said from January 1, small scale firms with monthly sales of less than CNY100,000 will be exempted from VAT in 2023. Any tax paid prior to the new policy can be claimed back retrospectively, the ministry said.