MNI China Press Digest July 18: Policy, Consumption Tax, SOEs

Highlights from Chinese press reports on Friday:

• China should consider front-loading next year’s government bond quota, to address local government implicit debt and help offset the shortfall in government bond supply expected in the final quarter, according to Ming Ming, chief economist at CITIC Securities. Authorities need to expand liquidity injections and reduce benchmark interest rates in the second half, Ming added. The use of unsold units purchased by authorities, should be expanded to cover long-term rental housing and apartments for skilled talent, accompanied by more flexible eligibility criteria, said Yuan Haixia, president of China Chengxin International Research Institute. (Source: China Securities Journal)
• China has lowered the price threshold for collecting consumption tax on luxury cars, China Securities Journal reported, citing a statement released Thursday by the Finance Ministry. Starting July 20, such taxes will apply to cars with a retail price of CNY900,000 or above, compared to the existing rule from 2016 of CNY1.3 million, the newspaper said. Luxury cars have seen a price drop in recent years, driven by expanded production and technological advances, the newspaper said, citing He Daixin, researcher from the Chinese Academy of Social Sciences. The ministry stated that second hand ultra-luxury vehicles will be exempt from consumption tax, the newspaper noted.
• The added value of state-owned enterprises directly under the central government reached CNY5.2 trillion in the first half of the year, with a total profit of CNY1.4 trillion, while fixed-asset investment hit CNY2 trillion, People's Daily reported, noting the results demonstrated SOEs' leading role in stabilising the economy. Central state-owned enterprises invested CNY414 billion in research and development in H1, with an intensity to GDP measure of 2.26%, roughly unchanged from the same period last year, according to the Daily.