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1.1.

Fiscal policy
1.1.1. Taxation policy
- China’s taxes on goods and services contribute to 48.3 percent of its
total tax income
- China also considers expanding the coverage of VAT and reducing
business tax items to simplify the taxation system and avoid double
tax collection
- China’s personal income tax only accounts for 4.7 percent of its
entire tax revenue,
- The Chinese government encourages its advanced technology
development by reducing the relative enterprise income taxes
1.1.2. Government revenue and expenditure
Gov revenue Gov expenditure

Source: www. Starmass.com/china


Source: www. Starmass.com/china
1.2 Monetary policy
1.2.1. Exchange rates
 The early '80s, China has allowed the implementation of
mechanisms to adjust rates to reflect declining purchasing power of
the yuan.
 In 1994, to control rate adjustment policy remain stable, China has
implemented policies to strengthen foreign exchange management,
aims to increase amount of foreign currency in State Bank, ensure
supply and demand of foreign Currency smoothly. Now, when
China's economy has grown, foreign exchange reserves were U.S.
$ 2.85 trillion.
1.2.2. Rate of reserve requirement

 In order to control inflation, in 2010, Central Bank of China has


increased rate of reserve requirement six times from 15.5% in late
2009 to 18.5% in December 2010

 According to the Central Bank, a prudent monetary policy to


control and stable price will be the top priority of the bank in 2011.
1.3.Foreign trade policy
1.3.1. Trade policy
 Free trade and investment played an important role in extending
China's reform programme to the manufacturing sector
 In 2010, China committed to implementation of reduction of tax with
the WTO.
 Implementation of import tax reduction for six commodities such as
vegetable
 In 2010, China committed to implementation of reduction of tax with
the WTO.
- Implementation of import tax reduction for six commodities such as
vegetable
 In 2010, China committed to implementation of reduction of tax with the
WTO.
- Implementation of import tax reduction for six commodities such as
vegetable

 To promote parallel trade relations and multinational, China will impose


special taxes on goods from areas such as the European Union's 10
countries, Chile, Pakistan, New Zealand and South Nations. For some
products from Hong Kong or Macao, China completely eliminated the
tax. In addition to the 41 countries are developing slowly as Laos,
Burma, Ethiopia ... policy also applies to tax exemptions.
1.3.2. Foreign investment

Source: www. Starmass.com/china


2. SOCIAL
2.1. Education

 In 1949, the illiteracy rate in China was 80% but by


2010 this ratio dropped to 3.5%. China is a country
where the number of people with university degrees
highest in the world, up 265 times in the past six
decades.
 However, the gap in education in urban and rural China
is growing. Many Chinese in countries do not have the
opportunity to enroll school and access new
technologies.
2.2 Labor: unemployment rate
 The unemployment rate in urban areas in country at 4.1%
in late September 2010, with 9.05 million people out of
work

 In the 9 months of 2010, total of 9.31 million new jobs


were created in urban areas, in excess of the target 9
million jobs should be created.
The Chinese government has launched several measures to
promote jobs, including: helping graduates and labor from
rural areas seeking work through facilitating practical and
vocational training institutions.
2.3. Living standard:
Healthcare, life expectance
Annual disposable income per capita for rural households and urban households

Source: www.starmass.com/china
REFERENCE
 The Case for Trade Liberalisation in Developing Countries” Journal of Economics
Perspectives Winter 1992 pgs 69-85 (available through LeedsMet Intranet)
 Ocampo J.A. and Taylor L (1998) “Trade liberalisation in developing countries: Modest
benefits but problems with productivity growth, macroeconomic prices and income
distribution “Economic Journal September 1998 (available through LeedsMet Intranet)

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