Chinese leaders promise lower business costs to boost growth

BEIJING -- Chinese leaders promised Monday to promote economic growth by cutting business costs and reducing surplus production capacity in some industries as they try to reverse an unexpectedly sharp downturn.

See Full Article

After an annual planning meeting, Communist Party leaders also promised to reduce financial risks and rein in rising debt that has prompted concern about possible threats to China's financial system.

The leadership under President Xi Jinping is in the midst of a multi-year effort to nurture slower, more sustainable growth based on domestic consumption instead of trade and investment. Growth has slowed more abruptly than expected over the past two years, forcing the party to juggle competing demands of shoring up the expansion while keeping reforms on track.

The pledges in Monday's brief statement weren't new, but they indicate where the ruling party's priorities will lie in 2016.

The statement also gave no details of how key issues such as the status of state companies that dominate industries from banking to energy to telecoms would be affected.

Economic growth decelerated to a six-year low of 6.9 per cent in the quarter ending in September and the International Monetary Fund and private sector forecasters expect it to fall as low as 6 per cent next year. Communist leaders insist they are comfortable with slower growth after the last decade's explosive double-digit expansion but face pressure to avoid a spike in job losses.

In 2016, the party will "reduce the burden on enterprises," the statement said. It promised to promote "mass entrepreneurship and innovation," but gave no details.

The party has taken steps to help entrepreneurs by reducing regulatory approvals required to start a business. In November, Beijing cut costs for entrepreneurs by reducing interest rates charged by credit unions and other small lenders that serve the private sector.

Beijing will "resolve excess capacity," the statement said, a reference to industries including steel, cement, glass and solar panels in which supply exceeds demand.

That glut has led to price-cutting wars that threaten the financial health of companies. Regulators want to promote consolidation through mergers but face resistance from local officials who are reluctant to lose jobs and tax revenue. Monday's statement suggested local leaders might come under increased pressure from Beijing to co-operate.

The ruling party unveiled plans in September to inject more competition into industries controlled by state companies and to force them to become financially self-reliant. But it stressed the ruling party would retain its dominant role in the economy.

Reform advocates complain the ruling party is dragging its feet on promises to open industries dominated by politically favoured state companies that benefit from monopolies, low-cost loans and other favours.

Party leaders also "vowed to take further steps to guard against and defuse financial risks," the statement said.

Financial analysts have warned China's financial system faces mounting risks due to soaring levels of debt. A largely unregulated industry of private sector finance companies that flourished over the past decade has suffered rising defaults as economic growth slows, causing losses for depositors and a spate of protests.

Chinese regulators say banks are financially healthy but they have tightened control over private finance companies. Last week, an Internet-based lender, Ezubo, that news reports said collected billions of dollars in deposits, was raided by police who seized a bank account and detained executives.



Advertisements

Latest Economic News

  • Asian stocks flat as investors await Federal Reserve meeting

    Economic CTV News
    SEOUL, Korea, Republic Of - Asian stock markets were little changed on Wednesday as investors took to the sidelines ahead of the Federal Reserve's announcement of the result of its meeting. KEEPING SCORE: Japan's Nikkei 225 was flat at 20,298.80 and South Korea's Kospi edged down 0.1 per cent to 2,413.63. Source
  • Tips for Canadians caught in Equifax's security hack

    Economic CTV News
    If you learn that you’re among the estimated 100,000 Canadians whose personal information – including addresses, social insurance numbers and credit card details – may have been compromised in the massive Equifax hack, cybersecurity expert Brian O’Higgins has some advice. Source
  • Court certifies class-action suit involving 450 foreign workers who got no jobs

    Economic CTV News
    VANCOUVER -- The Supreme Court of British Columbia has certified a class-action lawsuit against Mac's Convenience Stores and three immigration consultants alleged to have collected thousands of dollars from foreign workers who were promised jobs that didn't exist. Source
  • Bombardier workers to stage rally in Toronto over Boeing dispute, will walk out

    Economic CTV News
    TORONTO - The union representing Bombardier's production workers says employees at the company's aerospace plant in Toronto will walk out Wednesday -- a move meant to pressure Boeing to drop a trade complaint against Bombardier. Source
  • Ontario premier says 'supports' will ease transition to $15 minimum wage

    Economic CTV News
    WALTON, Ont. -- Ontario farmers and small businesses will receive support from the government as the province moves ahead with its plan to raise the minimum wage to $15 an hour, Premier Kathleen Wynne said Tuesday. Source
  • Liberals will offer measure to soften small business tax changes, source says

    Economic CBC News
    The Liberal government is set to offer a measure to Canadians affected by its proposed tax changes that would make the controversial reforms more palatable, CBC News has learned. "We are not just going to take, take, take," a senior government official, speaking on background, told CBC News. Source
  • Amazon returns giant cactus from Tucson

    Economic CTV News
    TUCSON, Ariz. -- Amazon has rejected the 21-foot (6.4-metre) Saguaro cactus that southern Arizona economic leaders planned to send as a gift to CEO Jeff Bezos, in a bid to attract the company's second headquarters. Source
  • Oilsands miner reports 123 birds killed in tailings pond incident

    Economic CTV News
    CALGARY - The Alberta Energy Regulator says it's responding to a report of bird fatalities at the soon-to-be-producing Fort Hills oilsands mine north of Fort McMurray. It says the mine has reported 123 waterfowl and songbirds have died or had to be euthanized. Source
  • Suncor investigating after more than 100 birds die at new oilsands mine

    Economic CTV News
    CALGARY -- Oilsands giant Suncor Energy says it is mystified by the discovery Sunday of dead and dying birds at a nearly complete northern Alberta mine that hasn't produced its first official barrel of oil yet. Source
  • 123 birds die at new oilsands mine; regulator investigating

    Economic CTV News
    CALGARY -- Oilsands giant Suncor Energy says it is mystified by the discovery Sunday of dead and dying birds at a nearly complete northern Alberta mine that hasn't produced its first official barrel of oil yet. Source