China to improve fiscal, financial policies to boost real economy

BEIJING, July 24 (Xinhua) -- China will better utilize its fiscal and financial policies to support the expansion of domestic demand, structural adjustment and boost the development of the real economy, according to a government meeting.

Measures will be taken to promote effective investment focusing on addressing inadequacies, gathering more momentum and improving people's livelihood, according to the State Council's executive meeting on Monday.

China will keep its macro policies stable, refrain from resorting to a deluge of strong stimulus policies, and the government will exercise targeted and well-timed regulation in the face of external uncertainties to make sure the economy performs within a reasonable range, the meeting said.

The Monday meeting agreed that a more proactive fiscal policy would be pursued. The government will focus on tax and fee cuts, and more companies will be eligible for the preferential policies of the additional deduction of R&D spending in taxable income, a policy expected to cut another 65 billion yuan (about 9.6 billion U.S. dollars) of tax this year, on top of an initial goal of reducing taxes and fees by 1.1 trillion yuan this year.

Efforts will be stepped up in issuing 1.35 trillion yuan of special bonds for local governments to see more tangible progress on ongoing infrastructure projects.

The country's prudent monetary policy will be neither too tight nor too loose, according to the meeting. The government will keep the social financing scale at a reasonable level, and liquidity will remain proper and sufficient.

The government will step up efforts to ensure delivery of the state financing guarantee fund, targeting 140 billion yuan of loans for about 150,000 small and micro firms each year.

The meeting also decided to deepen investment reform to solicit more private investment in fields including transportation, telecommunications, oil, and gas.

Capital demand for ongoing projects must be guaranteed effectively, it said.

A series of major projects will be pushed forward and planned to meet the need of development and improve people's livelihood.