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Govt to promote business services

By Zheng Yangpeng | China Daily | Updated: 2014-05-15 07:10

Qualified enterprises will receive favorable tax rates and investments

China will boost its business service industries to restructure its economy, stimulate domestic demand and increase job opportunities, according to a statement released after a State Council executive meeting on Wednesday.

The announcement is part of a broader central government effort to build up the nation's long underdeveloped service sector and wean the economy from its heavy reliance on manufacturing.

Business services have expanded rapidly in recent decades as clients and agencies increasingly choose to procure professional expertise and analyses from outside firms. Examples of business service jobs include accountants, consultants, financial industry workers, marketing and computer service providers.

The meeting, presided over by Premier Li Keqiang, said the development of business service sectors such as research, design and development, commercial service, marketing and after-sales service will be set as priorities.

The nation will encourage setting up industrial design firms and service centers, developing an R&D trade market, third-party logistics, promoting financial leasing and professional consulting service in a number of areas, and encouraging enterprises' service outsourcing, according to the statement.

The government will encourage the participation of private capital in developing business service industries by broadening market access and streamlining administrative approval procedures.

The country will open up the architectural design, accounting and auditing, commerce and logistics sectors to foreign investors in an orderly manner, the statement said.

Qualified enterprises may be identified as "high-tech enterprises" and enjoy a favorable income tax rate.

The meeting also urged that the trial program replacing business taxes with value-added taxes be expanded to all service sectors as soon as possible.

In the first quarter of this year, the share of tertiary industries (mainly service industries) in the economy rose to 49 percent, compared with 44.9 percent for secondary industries, according to the National Bureau of Statistics. The tertiary industry output exceeded that of the secondary industry for the first time at the beginning of last year.

Compared with the recent sluggish situation in manufacturing, the service sector has performed much better. The Purchasing Managers Index for the service industry rose to 54.8 in April from 54.5 in March, the NBS said. By comparison, the PMI for the manufacturing sector was 50.4 in April.

Foreign investors have also been more favorable to China's service industry. The sector in the first quarter attracted $17.39 billion of foreign investment, up 20.5 percent over the same period a year earlier. Foreign investment in the manufacturing sector slipped 11.7 percent in the same period.

zhengyangpeng@chinadaily.com.cn

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