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China Slashes Social Security Charges; Unshackles Local Property Markets
Beijing (AFP) Dec 22, 2008 Chinese firms can reduce contributions to various employee insurance schemes next year in a bid to stem mounting job losses amid the global economic crisis, the government said Monday. The finance ministry said insurance for basic medical, unemployment and workplace injury could be reduced "by a proper margin" for up to 12 months next year. "Companies are expected to pay hundreds of billion yuan (tens of billions of dollars) less in insurance and pension payments while tens of millions of jobs can be secured," it said. Firms in difficulty would also be able to delay payments to social security funds for up to six months in 2009, it said. The new measures are the latest in a series of efforts to stabilise the job market as China's economy slows amid the global economic crisis. Many exporters and manufacturers have had to shut down or downsize, leading to considerable job losses, and Chinese President Hu Jintao has warned of a "grim" employment situation next year.
China gives local governments room to boost property market Local authorities will be allowed to introduce new policies to increase the construction of low-cost housing and encourage demand, according to a statement posted on the central government's website. "The central government hopes to mobilise all resources available to boost the market, or at least prevent further slumps," Richard Lee, a Hong Kong-based analyst with Core Pacific-Yamaichi, told AFP. "This provides local government with an opportunity to use some administrative tools to protect their property markets," he said. The government statement provided few details about what local authorities will actually be allowed to do. However, observers speculated they may now be allowed to reduce stamp duties and other transaction costs. The announcement came as China's housing market is loosing steam with demand drying up amid the global financial crisis and slumps in the domestic stock market. Urban property prices rose 0.2 percent on year in November, lower than the 1.6 percent rise in October and the slowest growth in more than three years, according to official figures. Concerns are growing that the weakening property market will put further pressure on China's slowing economy as investment in the sector makes up for more than 20 percent of the country's urban fixed-asset investment. Apart from granting more flexibility to local governments, the statement by the central government also called on banks to increase credit to low-cost housing projects. It set a target of building 1.3 million low-cost houses a year from 2009 to 2011. Share This Article With Planet Earth
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