Impacting Messages from China 2018 National Congress
There are plenty of initiatives have been proposed since the currently undergoing China’s Annual National Congress (NPC) since its opening on 3 March, about politics, economy, education, military, cultural aspects and so forth.
WeChatApply team has just picked some key initiatives which we believe would have the significant impact on China’s consumer market in order to broaden your vision about what’s going to happen in China in next short or mid-term.
Tax cut on both individual and business
Since 2008 GFC, the State owned sector has enjoyed phenomenal growth thanks to leaning support from Central bank’s monetary policy while the private sector is shrinking their share in the whole economy. Offering tax cut for both individual and business is expected to improve personal and SME disposable income and encourage the private sector’s innovation, therefore improve consumer spending power.
Individual income tax system will lift the tax-free bar as the government has recognized the increasing living expenses driven by the ever-expanding urbanization and economic growth. It also includes expanding deductions related to education and childcare.
Chinese Premier Li Keqiang , on 5 March, promised to lighten the tax burden on businesses, pledging more than 800 billion yuan (S$167 billion ) in tax cuts.
Faster internet and lower fees.
The government will do more to speed up broadband and bring down internet rates to boost the development of a “Digital China”, said Mr Li at the opening of the annual session of the national Parliament.
The domestic data roaming charges will be abolished by 1 July this year and the rates for mobile internet services will be cut by at least 30 percent. Chen Xiongxiong, Vice Minister of the Ministry of Industry and Information Technology, said that the Ministry of Industry and Information Technology will promote basic telecom companies to speed up the process of combing and adjustment of packages, system development and transformation ensure that users will enjoy faster and cheaper mobile internet connection
The move would absolutely boost up the already fast developing mobile e-commerce market in China.
Strengthen financial market regulation
The development of digital payment method in China has reshaped the Chinese people’s lives for the last decade. The Central bank has not only felt threatening pressure from mobile payment giant of Alipay and WeChat Pay, it is now more worrying about the abuse of virtual currency such as Bitcoin as a retail payment and investment instrument. The central bank currently does not accept or approve related services.
It does not like to create a speculative product, people have the illusion of overnight riches. The bank needs to consider the overall situation and not let the virtual money conflict with the current financial order.
New energy vehicles will also grow rapidly
Miao Wei, Minister of the Ministry of Industry and Information Technology, stated that China’s new energy vehicle technology has greatly improved. Last year, the battery energy density reached twice the level of technology in 2012, and the price per kilowatt hour dropped by more than 70% from 2012. “As technology continues to advance and charging facilities continue to improve, new energy vehicles will continue to show rapid growth in the future.”
The sales volume of electric vehicles and new energy vehicles in China reached 770,000 with the total possessions exceeded 1.6 million, accounting for half of the world’s total in 2017. The development of electric vehicles in China is an important part of the transformation and upgrading of electric vehicles in the world. “Welcome that all countries’ electric vehicles come to the Chinese market so that we can all enjoy a wide range of products and diversified services.” Wan Gang, Minister of Science and Technology, said during the press conference.
NPC is scheduled to close on 20 March 2018. NPC is held annually at Capital Beijing during March, after Chinese New Year. Similar time, local congresses are also held at state and local governmental levels throughout the country.
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