Economy

　　Reserve Ratio Cut

　　China’s central bank cut the reserve requirement ratio for county-level rural commercial banks and rural credit cooperative unions on April 25 to help increase the flow of credit.

　　The ratio for county-level rural commercial lenders was trimmed by 2 percentage points and that for rural credit cooperatives was cut by 0.5 percentage points.

　　The adjustment will help enhance financial support for rural development and guide credit flow to rural areas， the People’s Bank of China said in an online statement.

　　However， the central bank did not say how much capital could be freed by cutting the ratio.

　　More Autonomy

　　China’s State Council announced on April 24 that the country will reduce the government’s power in terms of administrative approval for companies’ investment projects.

　　Investment projects will only need to be registered instead of being approved if they can be effectively managed through economic measures and laws in sectors with sufficient competition and where companies have measures for self-regulation， a statement on the Central Government’s website said.

　　Allowing companies’ autonomy in investment is a necessity in balancing the roles of the government and the market， as well as an important move in utilizing the pivotal role of investment， boosting restructuring through reforms， and maintaining the stable growth of the economy， the statement said.

　　Private Capital

　　China announced 80 major public infrastructure projects on April 24， experimenting with wider access for private and overseas investors.

　　The decision was made at a State Council executive meeting， the second meeting in a month to focus on infrastructure investment.

　　The projects will cover railway and harbor construction， new infrastructure needed by the area of information technology， major clean energy projects such as hydropower， wind power and photovoltaic power， as well as modernization projects in oil and gas and chemical industries.

　　It has been expected that overseas investors are likely to benefit from the new infrastructure investment program along with domestic private-sector investors.

　　The State Council said private investment will be encouraged to enter fields that are “monopolistic in nature” or those that “used to be dominated by government investment and State-owned enterprises.”

　　The State Council also decided that oil and gas exploration， public utilities， water resources projects and airport construction will be the next to open to private-sector investment.

　　Illegal Fund Raising

　　China will strengthen its efforts in cracking down on illegal fund-raising activities after an increase in such practices last year， a senior legal official said on April 22.

　　Public security departments prosecuted 3，700 illegal fund-raising cases in 2013， said Liu Zhangjun， Director General of the Office of the Inter-agency Anti-Illegal Fund-Raising Taskforce， at a press conference in Beijing.

　　The official said authorities had helped investors recover more than 6.4 billion yuan ($1.04 billion) of lenders’ losses last year.

　　“Currently we are faced with severe challenges. The numbers of illegal fund-raising cases， total funds raised and those involved remain at high levels，” said Liu.

　　Illegal fund-raising comes in different forms， such as by offering false wealth management products， valueless commemorative coins， stamps and currency notes， as well as the sale of sham stocks by self-proclaimed private banks to investors.

　　Meanwhile， online peer-to-peer (P2P) business has also become an area where illegal fund-raising occurs， along with the rising popularity of Internet finance in the country， Liu said. Authorities will enhance crackdown efforts against fraudulent advertisements while educating the public on risks.

　　FTZ Rules Submitted

　　Much-anticipated operational rules for the China (Shanghai) Pilot Free Trade Zone (FTZ)， awaiting approval by local legislators， are expected to come into force in the second half of 2014 and lay a legal foundation for further reform. Under the draft， the rules will take effect on August 1.

　　Jiang Sixian， Vice Chairman of the Standing Committee of Shanghai Municipal People’s Congress， told a forum in April that the new rules will be passed by the end of June. As a comprehensive framework， they will cover issues such as investment， trade， finance， tax and the legal environment. They also will legalize reforms already in place， such as removal of the foreign currency deposit rate and permission for offshore accounts in the FTZ.

　　Innovations adopted by the FTZ such as a “negative list” management approach for foreign investment， designed to bring about more transparency and freedom， also will be incorporated.

　　Tax Reduction

　　Chinese small businesses eligible for a tax break may enjoy the policy directly without an approval， according to China’s taxation authority.

　　The State Administration of Taxation (SAT) said in a statement on April 24 that small firms with annual taxable income under 100，000 yuan ($16，030) may have their business income tax halved without approvals.

　　In early April， China rolled out the tax break， which is valid from January 1 this year until the end of 2016， shortly after a State Council executive meeting， at which the government announced an economic package to address downward pressure.

　　“Eligible firms are only required to put their financial conditions on record at local taxation authorities， even though the firms have no complete accounting books，” said the SAT statement. Those that had paid business income tax fully before April 8 can get refunds， according to the statement.

　　Small and micro firms serve as the foundation for continuous and steady economic growth， according to SAT. By the end of 2013， there were about 11.7 million small and micro companies in China， accounting for 76.6 percent of the total number of firms in the country.

　　Urbanization Up

　　China will enhance reforms in the management of population data， land， funding guarantees， housing and environmental protection to boost the urbanization process.

　　Xu Shaoshi， Minister of the National Development and Reform Commission (NDRC)， said on April 19 that the rapid urbanization process in China has created problems， such as a huge population transfer from rural to urban areas and low efficiency in urban land use.

　　The work in population management will accelerate household registration system reform， improve basic public services and build a nationwide population database， Xu said.

　　The standard of urban land use and planning will be strictly complied with， while the NDRC will explore incentives for increasing and redeveloping urban construction land.

　　Fiscal and tax reforms will balance government financial resources with public service duties and attract more social capital for city construction through a transparent investment and financing mechanism and healthy bond issuance system， Xu said.

　　More affordable housing will be provided for basic housing requirements， while the market will play a bigger role in satisfying different consumption needs， according to the NDRC.

　　Meanwhile， the NDRC will continue to improve ecological urban design and industrial structure with stricter regulations on environmental protection in order to upgrade green development.

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