China Announced a Series of Measures Based in a Targeted Stimulus Program
China has recently announced a series of pre-growth measures in what economists are saying is a targeted stimulus program which came too after a series of disappointing economic indicators has raised concerns on the economic growth for the first quarter might go down below the official target growth.
During a executive meeting of the State Council that was president by Premier Li Keqiang, three major initiatives were announced from the implementation of tax breaks for SMEs, more support for redevelopment of run downed urban areas and additional investments on railways. The measures were discussed after a series of data points has showed a weak economic activity for the first quarter of 2014. Several economists said that if there are no new measures to be released the overall economy will probably sink down to an unacceptable level.
Analysts has also said that these initiatives that were announced during the meeting with the State Council signaled the leadership is eyeing a targeted stimulus while holding back from a all out massive stimulus that night be a risk in the already worsening debt and over capacity. The State Council is also considering implementing measures that will alleviate tax burden on SMEs as part of their effort in stimulating dynamics in this sector by lowering the threshold for enterprises that are eligible for a favorable policy treatment and by halving taxable revenue of the corporate income tax.