According to Bloomberg’s news, which is based on sources close to the subject, the Beijing administration is considering new tax incentives for companies producing high-tech products to support the economy.
Sources, who did not want to be identified because the information is not public, explained that the tax policy under consideration could save advanced producers hundreds of billions of yuan. However, it was stated that the plan is still subject to approval and is subject to change.
Chinese President Xi Jinping’s citing “a modern industrial system” as one of China’s top economic priorities at a meeting earlier this month led to expectations that measures such as subsidies would be taken for manufacturers. On the other hand, at a State Council meeting in May, support for advanced manufacturing businesses spanning a wide range of industries, from chips to artificial intelligence and biopharmaceuticals, was also discussed.
While China’s economic recovery has lost momentum after the Covid-19 outbreak, recent data show that exports and investment in the country have generally weakened. The delay in the recovery in the real estate market and the record level of youth unemployment are cited as examples of this situation.
Analysts say the government will take more targeted measures, such as tax incentives, to boost business confidence in this economic outlook.