China wrapped up its annual National People’s Congress (NPC) the other week in what was one of the most highly anticipated events this year. Here are the key takeaways from this year’s NPC.
China’s tilt towards pro-growth policies
The NPC reaffirmed China’s changing policy stance, with a renewed focus on pro-growth measures. China will holistically employ interest rate reductions as well as tax cuts.
Supportive policies in motion
Earlier in the March, China announced a RMB 2 trillion tax/fee cut to boost its corporate sector and private consumption. Specific policies were subsequently announced in the NPC, with cuts to both their equivalent to a GST tax and personal income taxes . The cuts were introduced faster than expected and reflects China’s commitment to quickly put things into motion. Moreover, the announcement showcases a more targeted approach towards interest rate adjustments.
Addressing foreign investor concerns
The NPC also introduced a new foreign investment law, which specifies that China will not force technology transfer, or restrict investors to repatriate proceeds, or break its promise/contract to foreign investors. The law, which comes into effect in 2020, addresses several outstanding foreign investor concerns and is a positive development that will boost foreign corporate investments over the longer-term.
Source: This article was sourced from Premium China Funds Management