The Chinese government announced it would expand coverage of a tariff rule to allow more processing trade enterprises to export and resell their products domestically.
In 2016, China launched a new taxation rule that allowed processing trade enterprises in the nine tariff-free zones in key places including Tianjin, Shanghai, Fujian and Guangdong provinces to choose to only pay the tariff for their raw materials instead of the entire product.
The move was aimed at providing these exporters with more flexibility to choose to resell their products domestically, in case global consumption is weak.
From Wednesday, the rule has been extended to all tariff-free zones across the country, according to a joint statement from the Ministry of Finance, General Administration of Customs and State Taxation Administration.
In the past, a processing trade company in a tariff-free zone, which exported a product and resold it back to the mainland, had to pay a 20% import tariff, 13% value-added tax and 30% consumption tax for the entire product. Under the new rule, it only has to pay a 10% tariff for the raw materials and a 13% value-added tax for the whole product.
The new move will reduce the taxation burden for a lot of manufacturers, stabilize exports and boost domestic consumption, said He Daixin, deputy director of the financial research office of the National Academy of Economic Strategy, Chinese Academy of Social Science.
Foreign direct investment
Foreign direct investment (FDI) into China fell 10.8% to 216.19 billion yuan (US$31.2 billion) in the first three months of this year from the same period last year due to the negative impact of the Covid-19 outbreak, according to the Ministry of Commerce.
FDI in the high-tech service sector surged 15.5% year on year in the first quarter, accounting for 29.9% of total FDI in the service sector.
In March, FDI into China decreased by 14.1% to 81.78 billion yuan from a year ago. In February, FDI dropped 25.6% to 46.83 billion yuan.
China will continue to open up and upgrade its foreign trade and investment to offset the negative economic impact of the Covid-19 pandemic, said the Ministry of Commerce.
China’s aviation industry suffered a combined loss of 39.82 billion yuan, including airlines’ operating loss of 33.62 billion yuan, in the first quarter of this year due to the Covid-19 epidemic, Xiong Jie, a spokesman of the Civil Aviation Administration of China, said at a press conference on Wednesday.
On March 9, the Civil Aviation Administration launched a series of new measures to support local airlines, including some subsidies and fuel surcharge reductions. Xiong said the administration would closely monitor the situation in the aviation sector and prepare to launch more supportive measures.
Vaccine tests in Beijing
Vaccine tests will kick off in Beijing within the next few days after two new coronavirus inactivated vaccines were approved by the State Food and Drug Administration for clinical trials.
The Beijing municipal government is going to set up vaccine production lines in a 70,000-square-meter factory and commence production within this year. It said the factory could produce more than 100 million doses of vaccines per year.
The Shenzhen stock exchange and Bursa Malaysia have signed a memorandum of understanding to explore areas and channels of cross-border collaboration.
The two stock exchanges will give full play to their pivotal role in the capital market, boost market confidence, serve the real economy and enhance cooperation under the Belt and Road initiative, said the Shenzhen stock exchange.
Three Chinese telecom giants and Huawei Technologies decided to speed up the development of their 5G technology and narrow-band Internet-of-things (NB-IoT) businesses in an online summit on Wednesday.
Under the guidance of the Ministry of Industry and Information Technology, China Telecom, China Mobile, China Unicom and Huawei brainstormed a series of 5G and NB-IoT applications during the online summit.
In January 2020, the number of NB-IoT’s global connections exceeded 100 million across 40 industries in more than 60 countries and places. In February, the number of such connections in China also exceeded 100 million.
China NB-IoT module manufacturers have so far shipped more than 6 million products overseas, said Cao Ming, vice-president of Huawei Wireless Solution. The products included electricity meters and NB-IoT chips.
The story was written by Xu Jiangshan and Yuan Tianyi and first published at ATimesCN.com. It was translated into English by Nadeem Xu.