Local Chinese governments unveil measures to jump-start economic growth

Local Chinese governments have rolled out an array of new measures, ranging from tax breaks to incentives for capital and talent, as part of the country's efforts to buoy market confidence and boost economic growth.

On Wednesday, Luohu District in Shenzhen, a manufacturing and tech hub in southern China, unveiled a raft of policies to attract financial institutions, wealth management enterprises and fund companies.

The district will provide a maximum of 50 million yuan (7.36 million U.S. dollars) in settlement subsidies and 10 million yuan in top management team rewards for new headquarters of institutions such as banks, insurance firms and securities companies as well as for related wealth management and asset management subsidiaries.

In recent years, the financial industry has become Luohu's fastest-growing development engine. There are nearly 100 licensed financial institutions in the district to date, ranking second in Shenzhen.

Shenzhen is among dozens of Chinese economic powerhouses that have been ramping up efforts since late January to accelerate economic rebound with generous incentives.

On Wednesday, east China's Jiangxi Province announced 28 policies and measures to unleash market vitality. It will accelerate the construction of 3,558 major projects this year, award travel agencies that bring tourists to the province aboard chartered buses, trains and flights, and subsidize certain recruitment activities.

In China's financial hub of Shanghai, the municipal government has introduced 32 policies and measures, including tax breaks and the issuance of consumption vouchers, to alleviate difficulties experienced by companies, reduce employment costs for enterprises, and restore and boost consumption.

Real estate and urban land use taxes will be temporarily exempted in the first half of 2023 for taxpayers in fields like accommodation and catering, sports and entertainment, transportation, tourism, retail, and warehousing in the country's manufacturing hub of Jiangsu Province, according to a document issued by the provincial government.

It is preliminarily estimated that tax reductions for market entities this year will exceed 4 billion yuan, said Huang Zhongmao, an official of the provincial finance department.

Chinese provinces have made robust 2023 targets for major economic indicators from GDP to retail sales, setting an upbeat tone for the economic recovery from COVID-19.

"The support policies show the capability of local governments to boost market confidence through various targeted measures. If they are well implemented, I believe that they will further drive all-round economic recovery," said Han Jian, a professor at Nanjing University's business school.

Han's view is echoed by Chen Bin, an expert from the State Information Center. Chen said the outstanding performances of many provinces and cities, observed since the beginning of the year, demonstrate the huge growth potential of the Chinese economy.

"A good start to the first quarter will greatly buoy confidence in economic development throughout the year," Chen added.