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China Says Government Will Cut Business Taxes

China's Premier Li Keqiang News ConferenceChina's Premier Li Keqiang News Conference
Li Keqiang, China's premier, speaks during a news conference at the 12th National People's Congress (NPC) at the Great Hall of the People in Beijing, China, on Wednesday, March 16, 2016Bloomberg via Getty Images

Chinese Premier Li Keqiang said on Thursday that the government would move to ease tax and paperwork burdens on companies, but added that the country is inexperienced in implementing such reforms and there would be challenges.

Li was speaking at a forum in Boao on the southern Chinese island of Hainan. It was the latest reiteration of the country’s vague plans to reduce taxes by a goal of 500 billion yuan, or more than $75 billion, and reform the value-added tax.

Li also said that China would not devalue the yuan exchange rate to boost exports as it would not help Chinese firms become more competitive, adding that the government would continue to reduce overcapacity in steel, coal and other sectors while helping develop smaller private enterprises.

He said China will “use market tools” to create new job opportunities to offset the impact of jobs destroyed by industrial overcapacity reductions.

 

Li’s statements are the latest in a string of cheerful press conferences. Last week Li told the country’s rubber-stamp parliament, “As long we stay on the course of reform and opening up, China’s economy will not suffer a hard landing.”