Tax reductions aim to boost service trade

The pilot programs will run for the next two years. Tailor-made policies are to be introduced to match the changes that the programs will bring, the meeting decided.

These matching policies will fall into three categories. First, a tax cut will be awarded to service companies with advanced technologies — with the tax level falling from 25 percent to about 15 percent.

Second, the government will set up a fund to guide innovation in the service trade, especially that of small and medium-sized enterprises based on the areas where the pilot programs are introduced.

Financial subsidies will be granted for the research and development that is needed urgently by the domestic market and for environmental protection services.

Third, the government will encourage financial institutions to expand their services to service companies.

Lin Lei, a researcher at the Center for Innovation and Development at the Chinese National Academy of Sciences, said the government's efforts to open access for the service industry "come at the right time".

"China's service industry has grown so rapidly over the past decade that it is able to accommodate more competition," he said.

Sunday's meeting also discussed innovation and upgrades for the medical and pharmaceutical industries and the development of Traditional Chinese Medicine.

zhangyue@chinadaily.com.cn