China eyes more tax cuts to sustain economic recovery: Economists

BEIJING - With the economy on a firm footing and fiscal revenue increasing, China will continue its efforts on tax reduction to lower business costs and sustain the strength of economic recovery, economists said.

"Government at all levels may maintain and expand the scheme of cutting taxes and administrative fees this year to support the real economy," said Wang Yuanhong, an economist at the State Information Center, a government think tank.

In the latest move, Shaanxi unveiled 30 policies, including lower corporate income tax rates for high-tech firms and exemption of certain administrative charges, to support the real economy for the next two years.

Jiang Zhen, an associate researcher of the National Academy of Economic Strategy, expects this year's policies to be more targeted - reducing business costs while addressing problems emerged during economic restructuring.

"The government should also move to streamline administrative procedures and push forward taxation system reform," Jiang said.

China pledged to implement the proactive fiscal policy in 2018. Improving economic momentum and rising fiscal revenue have provided more room for policy makers to maneuver.

The country's economy expanded 6.9 percent in 2017, with the pace of growth accelerating for the first time since 2011.

Fiscal revenue rose between 7 and 8 percent year-on-year in 2017, exceeding the government's annual target of 5 percent and up from 4.5 percent posted in 2016, according to Ning Jizhe, head of the National Bureau of Statistics.