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Lower taxes brings brighter prospects for China

Editor: Li Kun 丨CCTV.com

01-18-2016 11:33 BJT

By Christina Kitova, associate partner at Hodges Media Communications, based in Oklahoma City, USA

The Shang Dynasty had come into existence in 1500 B.C. China's society then had begun to engage in progressive changes. The moment they developed bronze technology, a structured class society had emerged and so did the use of currency. 

 

These changes allowed emperors to increase their ability to collect taxes from citizens and to receive tributes from other countries. The Chinese utilized a system of taxing plots by the size of fields that an individual owned. 
 
The Zhou Dynasty came into power next and urbanization had developed. With a socio-economic evolution, the rulers could tax people at higher rates, which meant the revenues could expand rapidly.

The Qin and then the Han dynasties followed after the Zhou and taxation had become far more efficient and streamlined during the two imperial eras. 

By reflecting on Chinese history, we can better understand today's China and its future.

The Chinese leadership, led by President Xi Jinping, have endorsed a plan favored by the Central Economic Conference, which would make it a key priority to lower business costs in 2016 and beyond. 
 
Beijing plans to reduce the tax burdens and associated fees, which have been imposed on businesses.

The basis for this is in having five insurances and one fully-streamlined fund designed to empower one of the world's largest economies. Government fees and interest rates, as well as electricity rates, will also be lowered for the benefit of all.
 
The approach demonstrates that Beijing is seeking ways to take a more pro-market approach that implements lower taxes and less government spending to boost its economy.

China had cut taxes on imports last year. The new development demonstrates the commitment that the nation is looking to attract more foreign capital, while taking care of its domestic businesses. 
 
Some Chinese consumers had expressed concerns that they are paying higher prices for goods than in other markets, partly due to steep import taxes.
 
On average, consumers in China pay 20 percent more for luxury products than their counterparts in other markets around the world.
 
Chinese consumers had been purchasing products in large quantities overseas, but now they are more likely to purchase the same goods locally for added convenience.

Having lowered import taxes will benefit the country with an increase of imports, which are more reasonably priced, helping to boost local shops. Lowering taxes will also have an additional impact of potentially leading to a drop in home prices and furniture. 
 
The policy projection demonstrates the strategy that would be a key catalyst for growth within the corporate sector, helping to eliminate underemployment. This guarantees a strong economic expansion with steady growth stabilization. 
 
Renewed domestic growth can be rooted within an inexpensive and stable economic atmosphere, and hence there would be a revitalized interest from foreign corporations to do more business in China. 
 
China is moving forward and stands poised to become the world's number one economy, sooner or later. With the Chinese currency, Yuan's use increasing around the world, China's economic influence has become even more evident. 
 
The nation's leadership is creating solutions with strong future commitments to support the business sector and such newly-enacted policies would continue to offer opportunities for businesses to expand at home and abroad, which promises a far more favorable climate for imports.

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

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