* China unveils detailed plans to lower business costs
* Aims to lower financing, labour, energy, logistics costs
* Aims for "reasonable decline" in costs in three years
* Aims to cut firms' annual tax burden by over $75 bln in 1-2 yrs
(Adds details)
BEIJING, Aug 22 (Reuters) - China's cabinet has unveiled detailed plans to lower business costs in the next several years, the latest move to cushion an economic slowdown in the world's second-largest economy.
Beijing aims to cut financing and labour costs, energy and logistics costs as well as reduce the annual tax burden for firms over the next few years, according to a guidance published on a government website on Monday.
China is looking to achieve a 'reasonable decline' in the overall cost for firms in the real economy in about three years", the cabinet said, adding that the measures will help "effectively cope with the downward pressure on the economy".
The central bank will maintain ample liquidity in the banking system while keeping an appropriate monetary and financial environment, stepping up support for small firms via differentiated reserve requirement ratios, relending and rediscount, it said.
Banks will reasonably price their loans and will be barred from linking firms' loan applications with deposits and charging "irregular" fees, according to the cabinet's guidance. It added that banks should also step up bad loan disposal.
The government will develop equity financing, appropriately expand the size of corporate bond issuance and allow selected firms to conduct debt-to-equity swaps, the cabinet said.
China has already moved to lower labour costs for firms by cutting their pension contributions in some provinces, it said.
The government will also relax controls on energy prices in some sectors to reflect market supply and demand, it said.
According to the statement, the government aims to reduce the annual tax burden on firms by more than 500 billion yuan ($75.16 billion) within the next one to two years.
In July, a senior central bank official was quoted by local media as saying that tax cuts would be a more effective way of stimulating the economy than interest rate cuts, as companies are still unwilling to invest. ($1 = 6.6525 Chinese yuan)
(Reporting By Beijing Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong and Himani Sarkar) ((winni.zhou@thomsonreuters.com; +86 10 6627 1276; Reuters Messaging: winni.zhou.thomsonreuters.com@reuters.net))
* Aims to lower financing, labour, energy, logistics costs
* Aims for "reasonable decline" in costs in three years
* Aims to cut firms' annual tax burden by over $75 bln in 1-2 yrs
(Adds details)
BEIJING, Aug 22 (Reuters) - China's cabinet has unveiled detailed plans to lower business costs in the next several years, the latest move to cushion an economic slowdown in the world's second-largest economy.
Beijing aims to cut financing and labour costs, energy and logistics costs as well as reduce the annual tax burden for firms over the next few years, according to a guidance published on a government website on Monday.
China is looking to achieve a 'reasonable decline' in the overall cost for firms in the real economy in about three years", the cabinet said, adding that the measures will help "effectively cope with the downward pressure on the economy".
The central bank will maintain ample liquidity in the banking system while keeping an appropriate monetary and financial environment, stepping up support for small firms via differentiated reserve requirement ratios, relending and rediscount, it said.
Banks will reasonably price their loans and will be barred from linking firms' loan applications with deposits and charging "irregular" fees, according to the cabinet's guidance. It added that banks should also step up bad loan disposal.
The government will develop equity financing, appropriately expand the size of corporate bond issuance and allow selected firms to conduct debt-to-equity swaps, the cabinet said.
China has already moved to lower labour costs for firms by cutting their pension contributions in some provinces, it said.
The government will also relax controls on energy prices in some sectors to reflect market supply and demand, it said.
According to the statement, the government aims to reduce the annual tax burden on firms by more than 500 billion yuan ($75.16 billion) within the next one to two years.
In July, a senior central bank official was quoted by local media as saying that tax cuts would be a more effective way of stimulating the economy than interest rate cuts, as companies are still unwilling to invest. ($1 = 6.6525 Chinese yuan)
(Reporting By Beijing Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong and Himani Sarkar) ((winni.zhou@thomsonreuters.com; +86 10 6627 1276; Reuters Messaging: winni.zhou.thomsonreuters.com@reuters.net))
