China Takes Comprehensive Policy in Eight Aspects to Cut Costs in Real Economy Enterprises

According to a statement from National Development and Reform Commission (“NDRC”) on June 13, 2023, NDRC, Ministry of Finance (“MOF”) and other two state organs have jointly released the Circular on CuttingCosts in 2023 (the “Circular”), calling for implementation of 22 tasks in eight aspects.

The Circular emphasizes the need to enhance the accuracy and relevance of tax and fee preferential policies, improve the quality and effectiveness of financial services to the real economy, continue to reduce systemic transaction costs, ease the pressure on enterprise labor costs, reduce the cost of raw materials for enterprises sites, promote the quality and efficiency of logistics and reduce costs, improve the efficiency of enterprise capital turnover, and stimulate enterprises to explore internal potential. The Circular calls for implementing support policies for implementing taxation, the first (set) insurance compensation and other support policies, and introducing targeted tax and fee reduction policies in areas such as science and technology innovation and key industrial chains, actively promoting amendments of the bidding law and government procurement law to further regulate government procurement practices, striving to break the unreasonable restrictions and barriers set for enterprises of different ownership, foreign enterprises, continuing to implement the policy of phased reduction of unemployment insurance and work injury insurance rates, the implementation period is extended to the end of 2024.