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Apr 29, 2014

China adds tax break to help jobs

Employment is government's main priority: Beijing
By Reuters
    
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BEIJING (Reuters) — China's Finance Ministry said on Tuesday that it would extend tax breaks for job creation, as the government seeks to boost the labour market, while the banking regulator warned slowing economic growth raised the risk of bad loans.

Beijing has repeatedly stressed that employment is the government's main priority and economists say it is the top factor that could trigger large-scale stimulus measures if the world's second-biggest economy continues to lose momentum.

China's economic growth dipped to an 18-month low of 7.4 per cent in the first quarter, with exports, investment and credit all pointing to a weak showing and fanning concerns about pressures on the job market.

The Finance Ministry said it would extend for another three years tax break measures to companies that create new jobs and for people who start their own firms.

The government has unveiled a number of steps to boost employment, including extending tax breaks for entrepreneurs to the end of 2016 and broadened to include all industries and types of workers.

The government has pledged to create 85 million jobs in urban and rural areas between 2012 and 2015 while holding the jobless rate below 5 percent, underscoring its resolve to stave off any unrest that may flare up asChina's economy slows.

Separately, the China Banking Regulatory Commission said on its website that banks needed to take steps to protect themselves from the risks associated with loan repayments, particularly to problems in the real estate market and from local government financing vehicles.

"Our country's economy is still going through a period of pain, of changes in growth and structural re-adjustment," it said.

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