MNI China Press Digest July 4: Redistribution, Solar, Europe

Highlights from Chinese press reports on Friday:

• China should increase consumption propensity through redistributive reforms such as raising the proportion of disposable income in the household sector and boosting spending on public services, wrote Sheng Songcheng, dean at the China Chief Economist Forum Institute, in an Yicai.com article. China’s ratio of disposable income to GDP stands at 60.8%, significantly lower than the 70%-85% in Europe and the U.S. Sheng called for a 5% cut in income tax for annual income earners of CNY100,000-350,000, which would only reduce tax revenue by CNY100 billion and stabilise the cash flow and expectations of low- and middle-income groups.
• China’s photovoltaic industry must manage disorderly low-price competition, deepen the construction of a unified national market and promote the orderly exit of outdated capacity, according to Jin Zhuanglong, party secretary of the Ministry of Industry and Information Technology. Speaking at a symposium held with 14 photovoltaic companies and heads of industry associations, Jin said the Ministry will further enhance macro-level and industry governance, and strengthen standards leadership. Following the meeting, a representative from LONGi Green Energy said the firm would exit the price war by implementing differentiated technology.
• Chinese auto-part exporters are offsetting slower U.S. growth with faster demand from other markets, with European business up 20% in some cases, according to manufacturers interviewed by Yicai. Xu Haidong, deputy secretary-general at the China Association of Automobile Manufacturers, said the removal of the de minimis exemption policy for small packages was mitigated by firms shipments to warehouses in the U.S. Pang Tao, general manager of sales at eBay Greater China, said that firms will focus on Europe next as its growth rate had clearly surpassed the U.S.