MOSCOW, 5 Mar – Project “Russia-China: Main”. China has set an unexpectedly low economic development bar for 2021. Despite the fact that most economists expect China's GDP to grow by 8% or more, the report on the work of the government published on March 5 indicated the rate of development of the Chinese economy as only “over 6%.”
Observers note that such modesty of the authorities is fully justified. Wang Tao, senior economist at investment bank UBS, explains: “Although everyone expects the Chinese economy to grow by 8-9%, the designation of such an indicator in the government's work plans can be perceived by business and local administrations as a signal of continued strong government support. became a signal of a reduction in state stimulation of the economy. “Russia-China: The Main
Indeed, against the backdrop of a post-epidemic recovery, the state has reduced measures to support the economy. The budget deficit has been reduced from 3.6% of GDP last year to 3.2% of GDP in 2021. This year, the central government will not issue special government bonds to support the economy. Recall that last year, the central authorities issued “COVID-bonds” worth 1 trillion yuan. The issuance of special government bonds by local governments will also decrease slightly: from 3.75 trillion yuan in 2020 to 3.65 trillion in 2021.
At the same time, the reduction of the package of anti-crisis measures does not mean their complete curtailment. The policy of tax breaks for businesses will continue, especially for small businesses that have suffered the most from the epidemic. Thus, the policy of exemption from VAT for small businesses will continue. Its coverage will expand: enterprises with monthly sales of 150,000 yuan and below will be exempted from the tax, while earlier this bar was at the level of 100,000 yuan. In addition, the income tax for small and micro enterprises with annual income of less than one million yuan will be cut by 50%.
State policy is focused primarily on maintaining business activity and employment. 55.9 billion yuan will be allocated to support employment this year. To prevent mass layoffs, the policy of temporarily reducing the volume of social contributions, on which Chinese businesses saved 1.54 trillion yuan ($ 238 billion) in 2020, will continue. According to the government's plans, 11 million new jobs will be created across the country. Over the next five years (2021-2025), unemployment in the PRC is planned to be kept at a level of no more than 5.5%.