MNI China Press Digest Jan 12: GDP, PBOC, Tax

Highlights from Chinese press reports on Thursday:

• Shanghai will target GDP growth of above 5.5% in 2023, as it makes efforts to boost consumption and develop its digital economy, according to a recent government work report delivered by Shanghai Mayor Gong Zheng. The unemployment rate is targeted at below 5%, and work will be made to strengthen its global financial and consumption center status. The city will look at increasing cross-border yuan business and facilitate international financial services. (Source: 21st Century Business Herald)
• Banks in China will be encouraged to carry out overseas yuan loans, lower transaction financing costs, and support the settlement of bulk commodities and trade of all types in the yuan, according to a circular jointly issued by the People’s Bank Of China and Ministry of Commerce. Support should be given to promote yuan-denominated trading with RCEP members, and encourage local governments to use special funds targeting trade services innovation, and projects likely to boost yuan transactions abroad, according to the PBOC. For overseas projects, such as those included in the Belt and Road initiative, priority should be given to use the yuan to settle business transactions.
• Tax reduction policies in 2023 are expected to focus on promoting R&D and boosting consumption, according to analysts cited by Securities Daily. Analysts said the recent removal of VAT for small businesses with sales less than CNY100,000 per month, will boost business confidence, help employment, and ensure people's livelihoods. Looking forwards, analysts expected further tax relief measures to be tilted towards advanced manufacturing and high-tech enterprises. Policies will be needed to help stabilize the confidence and accelerate the recovery of the national economy, the paper noted.