China premier Li Keqiang says govt will cut taxes and red tape, keep yuan stable

Chinese Premier Li Keqiang speaks during Lancang-Mekong cooperation leaders' meeting in Sanya, on March 23, 2016.
Chinese Premier Li Keqiang speaks during Lancang-Mekong cooperation leaders' meeting in Sanya, on March 23, 2016. PHOTO: REUTERS

BOAO, China (REUTERS) - Chinese Premier Li Keqiang said on Thursday (March 24) that the government would move to ease tax and paperwork burdens on companies, but added that the country is inexperienced in implementing such reforms and there would be challenges.

Li was speaking at a forum in Boao on the southern Chinese island of Hainan.

Li repeated previous statements that the country hopes to cut taxes by 500 billion yuan (S$105 billion) in 2016 and promote reforms to the value-added-tax (VAT) system.

He also reiterated that China would not devalue the yuan exchange rate to boost exports as it would not help Chinese firms become more competitive, adding that the government would continue to reduce overcapacity in steel, coal and other sectors while helping develop smaller private enterprises.

He said China will "use market tools" to create new job opportunities to offset the impact of jobs destroyed by industrial overcapacity reductions.