China will speed up reforms of resource and property-related taxes as well as the bank interest rate system this year, the China Securities Journal reported on Thursday, citing a cabinet meeting. The government will push forward key economic reforms with "greater determination and courage," the newspaper quoted a statement from the Wednesday cabinet meeting as saying.
China will extend the tax reform and "steadily push forward electricity price reforms and perfect the pricing mechanism on oil products and natural gas," it said. Last June, the government began levying a 5 percent resources tax on crude and natural gas output in the north-western Xinjiang region, replacing earlier levies based on output, aiming to boost fiscal revenue for local governments.
The government will also "adjust and improve" tax polices related to property, the newspaper said, without elaborating. China has launched a maiden property tax in Chongqing and Shanghai to help rein in the red-hot property sector. The government also plans to establish a mechanism to help Chinese firms curb risks when they invest overseas, the newspaper said.
The cabinet reiterated its goal to make the interest rate system more market-driven, but gave no details. China took a big step toward liberalising interest rates in 2004 by letting banks charge borrowers well above benchmark rates and giving them some leeway to cut deposit rates. Liberalisation has made little headway, though, since officials fear any rush to free up interest rates, particularly deposit rates, could destabilise the financial sector. China still bans banks from raising yuan deposit rates above the benchmark and keeps a floor under lending rates.
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