Since value-added tax reforms were implemented in April, nearly 300,000 taxpayers in the province’s wholesale and retail trades have benefited from cuts of RMB9.835 billion, reducing their tax bills by almost half (45.52%)
The cuts, which accounted for 33.68% of the total tax reduction across all businesses, excluded Shenzhen, whose tax affairs are administered separately.
In the first half of this year, the wholesale and retail trade generated sales of RMB2068 billion in Guangdong (including Shenzhen), up 7.7% year on year.
In its latest effort to stimulate domestic consumption, the Shenzhen government has set up a dedicated fund to reward top-performing retailers by fattening their profit margins.
Mom n’ pop shops need not apply. The scheme is for retailers who have achieved more than RMB100 million in YoY sales growth. They will get a cash “reward” of RMB500,000, i.e., an addition of 0.5% to their profit margins for every RMB100 million of sales they achieve. The reward will be capped at RMB10 million per company.
The fund will also be used to encourage the development of original design, technological research and development, procurement and trading, events and exhibitions, and brand building. Companies making use of new technologies, such as IoT, big data and blockchain, to develop new retail projects, will be eligible for 20% of cost subsidies, capped at RMB20 million per year.
Hong Kong was already struggling with the onset of the US-China trade war, which hit re-exports through the city. But now it would seem that the recent street protests are about to push the economy further into the doldrums by dampening consumer spending and curtailing tourism. An SCMP reportquotes the chief economist of the HK General Chamber of Commerce as saying:
“The overall picture is gloomy. If the political tensions continue or escalate, they could take a bigger toll on retail sales, by straining consumer sentiment of local households, as well as pushing tourists towards other destinations.”
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The American Chamber of Commerce in China has released its Second Joint Survey on the Impact of Tariffs. The survey received nearly 250 responses, with 61.6% manufacturing-related, 25.5% services, 3.8% retail and distribution, and 9.6% from other industries.
The negative impact of tariffs is clear and hurting the competitiveness of American companies in China. The vast majority (74.9%) of respondents said the increases in US and Chinese tariffs are having a negative impact on their businesses.
To cope with the impact of the tariffs, companies are increasingly adopting an “In China, for China” strategy (35.3 percent), or delaying and canceling investment decisions (33.2 percent). In China, for China is a strategy to localize manufacturing and sourcing within China to mainly serve the China market.
While over half of respondents (53.1%) have not seen any increase in non-tariff retaliatory measures by the Chinese government, roughly one in five have experienced increased inspections (20.1%) and slower customs clearance (19.7%).
Approximately 40.7% of respondents are considering or have relocated manufacturing facilities outside China. For those that are moving manufacturing out of China, Southeast Asia (24.7%) and Mexico (10.5%) are the top destinations.