MNI Policy: China May Increase Tax Cuts to Spur Confidence: Ma

--Tax & Fee Cuts May Exceed 1% GDP in 2019

--Greater measures to Boost Lending to Private Companies

--U.S.-China Trade Conflicts More Likely to Ease

     BEIJING (MNI) - China may introduce significant measures including tax cuts

to restore confidence in the economy amid a persistently dropping stock market,

according to Ma Jun, a member of the country's monetary policy body. 

     The government under Premier Li Keqiang may cut taxes and administrative

fees next year amounting to more than 1% of the country's economy, Ma, also the

former chief economist at the People's Bank of China (PBOC), said in a press

statement, a copy of which was received by MNI. The effect may be greater in

proportion than the tax cuts implemented by the U.S. government, said Ma. 

     "There will be a series of policy measures to enhance investors' confidence

in the market in the near future," Ma said commenting on a meeting by the State

Council's Financial Stability and Development Committee following the recent

A-share selloff that sent the market to the lowest level in four years.

     There is increasing willingness by the U.S. to restart trade talks with

China for "various reasons", and greater probability that the trade frictions

between the two countries are to be eased, Ma said without elaborating.

     "Substantial measures" to alleviate financing difficulties for private

enterprises can also be expected in the near future, Ma predicted. 

     Regulators may forbid lenders to discriminate against private business

borrowers using the clause of "lifetime liabilities on defaults," while special

funds guaranteed by the government may be set up to encourage lending, said Ma.

     Liquidity in the capital markets will be improved in the near term due to

help from state-owned enterprises, insurance and wealth management products, as

well as listed companies' share buy-backs, Ma said.

     "Moves by some local governments injecting liquidity to listed companies

will also help ease the liquidity shortage," Ma added.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

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