ANNOUNCEMENT 27 Oct 2017

October 27th, 2017 - The Chinese government released a plan clearly promoting the development of indigenous firms over foreign ones.

NUMBER OF INTERVENTIONS

2

  • 0 harmful
  • 2 neutral
  • 0 liberalising

SOURCE

PRC Ministry of Industry and Information Technology, November 23rd, 2017. (工信部联规[2017]243号 十六部门关于印发发挥民间投资作用推进实施制造强国战略指导意见的通知)
http://www.miit.gov.cn/n1146295/n1652858/n1652930/n3757016/c5914389/content.html

Inception date: No inception date

State loan

In November 2017, sixteen Chinese ministries jointly published a document titled 'Guiding Opinions on Promoting Private Investment to Realise the Plan of China Becoming a Strong Manufacturing Nation' ('the Plan').

A lengthy document, however, the Plan's goals are exactly as its title would suggest - continuing China's trajectory of growth in the manufacturing sector using private investments as a medium.

The Plan is a top-level document, with directives levelled at various ministries on the next rung down in China's chain of command. It calls for several financial support mechanisms to be enacted by government agencies to ensure this occurs. One of these is the increased use of various 'guidance funds' to boost firms that are deemed to be in the 'advanced manufacturing' sector.

In addition, the plan calls for preferential tax policies to be broadened in scope, instruments to be drawn up by other ministries in order to promote both private and public (particularly at a local level) investment in targeted firms. It also proposes favourable credit measures to be given to SMEs in eligible sectors in order to enhance the chances of their success. Finally, there is a directive for relevant ministries to enact measures to ensure that not only firms directly targeted by this plan receive assistance, but also those that are 'up- and downstream in the supply chain', to ensure holistic growth.

The Plan comes during a period where China's previously bullish growth, primarily spurred by the manufacturing sector, began to slow down. Recognising this, the government has implemented several plans intended to boost the service sector and transform the economy into a service-driven one.

It is noteworthy, therefore, that large-scale incentives for manufacturers, such as this one, continue to be released (see related act for more examples).

The definition of 'advanced manufacturing' is rather broad, covering basically any good that can be 'manufactured' in a technologically advanced factory, hence the broad sectoral taxonomy of this intervention.

AFFECTED PRODUCTS

 
N/A
Inception date: No inception date

Tax or social insurance relief

In November 2017, sixteen Chinese ministries jointly published a document titled 'Guiding Opinions on Promoting Private Investment to Realise the Plan of China Becoming a Strong Manufacturing Nation' ('the Plan').

A lengthy document, however, the Plan's goals are exactly as its title would suggest - continuing China's trajectory of growth in the manufacturing sector using private investments as a medium.

The Plan is a top-level document, with directives levelled at various ministries on the next rung down in China's chain of command. It calls for several financial support mechanisms to be enacted by government agencies to ensure this occurs. One of these is the increased use of various 'guidance funds' to boost firms that are deemed to be in the 'advanced manufacturing' sector.

In addition, the plan calls for preferential tax policies to be broadened in scope, instruments to be drawn up by other ministries in order to promote both private and public (particularly at a local level) investment in targeted firms. It also proposes favourable credit measures to be given to SMEs in eligible sectors in order to enhance the chances of their success. Finally, there is a directive for relevant ministries to enact measures to ensure that not only firms directly targeted by this plan receive assistance, but also those that are 'up- and downstream in the supply chain', to ensure holistic growth.

The Plan comes during a period where China's previously bullish growth, primarily spurred by the manufacturing sector, began to slow down. Recognising this, the government has implemented several plans intended to boost the service sector and transform the economy into a service-driven one.

It is noteworthy, therefore, that large-scale incentives for manufacturers, such as this one, continue to be released (see related act for more examples).

The definition of 'advanced manufacturing' is rather broad, covering basically any good that can be 'manufactured' in a technologically advanced factory, hence the broad sectoral taxonomy of this intervention.

 
N/A