from the current 800 yuan

China’s legislature Thursday made a decision to raise the cutoff point of the monthly personal income tax from the current 800 yuan to 1,600 yuan, effective from Jan. 1, 2006.

The amount is 100 yuan (one US dollar equals approximately 8.1 RMB yuan) higher than the proposed 1,500 yuan cutoff point in the draft amendments to the personal income tax law, an indication that the law-makers have considered opinions aired at a previous public hearing.

“We learned from this hearing that people hope the cutoff point should be even higher,” said Lou Jiwei, vice-minister of Finance.

“But in that case, fiscal revenue would decrease too much and our capability to support the growth of the western regions would be impaired,” he said.

According to Lou, more than 50 percent of central finance goes to transfer payments to the relatively backward western regions.

He said raising the cutoff point from 800 yuan to 1,500 yuan will result in more than 23 billion yuan (approximately 2.84 billion US dollars) loss of fiscal revenue each year. Raising the point to 1,600 yuan will incur an additional fiscal loss of more than 5 billion yuan (approximately 617 million dollars) each year.

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China’s domestic consumption will grow by 11.7 percent in 2006 as the country has laid out a batch of measures to boost farmers’ and urban low-income group’s earnings, said experts in Beijing.
The growth will be 0.2 percentage points higher compared with the expected consumption increase this year, the Economic Information Daily quoted Qi Jingmei, an expert with the State Information Center as saying.

China is striving to maintain fast economic growth while shifting to domestic driving forces, especially consumption, in order to reduce the heavy reliance on exports.

Qi said a demand-led model is stressed in the guiding proposal for the 2006-2010 period which was passed earlier this month, and this would have a direct effect on consumption growth next year.

Chinese farmers’ income will rise six percent this year, said Qi, citing the good harvest across the country. Following last year’s 6.8 percent income increase, the continuing growth will make Chinese farmers more willing to spend.

In the cities, Qi said the lift-up of the minimum wage for lay-offs this year will increase their spending power and more measures are expected in 2006.

Qi also said the government move to raise the threshold of the personal income tax will improve the income of ordinary citizens.

According to a proposal, China will lift the threshold from 800 yuan (98.8 US dollars) to 1,500 yuan (185 US dollars) or higher soon.

Despite the stimulating efforts, Qi said the rising oil prices may dent people’s consumption and the slowdown of the property market is not likely to take off next year.

- Xinhua

BEIJING- China reported a 4.2 percent registered urban unemployment rate by the end of September, according to statistics of the Ministry of Labor and Social Security.
The statistics, released by the ministry at a press conference here Tuesday, also show an additional 8.1 million urban people found jobs in the first nine months of this year.

The two figures are near the employment targets of 2005 set by the government, namely an additional 9 million people find jobs and keeping the registered urban unemployment rate below 4.6 percent.

The registered urban unemployment rate in China has been kept below 5 percent in recent years, which was 3.6 percent in 2001, 4 percent in 2002, 4.3 percent in 2003 and 4.2 percent in 2004, according to statistics of the ministry.

- Xinhua

BEIJING (AFX) - China could rival the US as Toyota’s largest overseas production base within five years, manufacturing 500,000 cars annually and more than doubling its share of the China auto market by 2010, Xinhua said.

The official news agency said the Japanese auto giant’s vice-president Inaba Yoshimi released the targets at a ceremony for the third factory to be built by its joint venture, called Tianjin FAW Toyota, with China’s leading automaker FAW.

Yoshimi said that Toyota expects to produce 500,000 cars a year in China with an annual sales volume of 80 bln yuan by 2010 based on its partnership with FAW. He did not give comparative data, but said that increases in capacity would boost China production to approach that of Toyota’s manufacturing base in the US.

The vice president also said that Toyota’s share of the Chinese auto market should increase to 10 pct from less than four pct currently over the same timeframe by manufacturing different car models for different customer groups, according to the report.

The latest factory has been designed with an annual car production capacity of 200,000 units, it said.

Tianjin FAW Toyota’s plants have an annual output capacity of 220,000 units currently.

FAW Group and Toyota became business partners in August 2002, and have worked together on luxury cars, small cars and luxury special utility vehicles, Xinhua said.

It added that the joint venture plans to produce some 140,000 cars this year and 200,000 in 2006.

Toyota has two auto joint ventures in China — Tianjin FAW Toyota Motor Co Ltd, which produces Vios, Corolla and Crown sedans at its two plants in northern China, and Guangzhou Toyota Motor Co Ltd, which makes Camry sedans in southern China.

The report made no mention of Guangzhou Toyota Motor Co’s role in Toyota’s China targets.

(1 usd = 8.1 yuan)
sr/dg/dk
http://www.forbes.com/business/feeds/afx/2005/10/24/afx2296000.html

- Forbes/AFX News Limited

The Chinese mainland’s trade with its top 10 partners in January-August 2005, with the value in billion US dollars and change on a year-on-year basis:

Partner Total Change Exports Change Imports Change
EU 137.998 23.7% 90.763 38.7% 47.235 2.4%
USA 133.673 24.9% 101.820 32.8% 31.853 5.1%
Japan 117.567 10.3% 54.288 19.9% 63.279 3.2%
HK 81.990 20.5% 73.914 21.9% 8.076 9.1%
ROK 71.028 25.7% 22.610 35.2% 48.417 21.7%
Taiwan 56.451 13.2% 10.558 28.9% 45.893 10.1%
Germany 39.668 14.6% 20.160 41.4% 19.508 -4.2%
Singapore 20.895 27.3% 10.317 34.4% 10.578 21.0%
Malaysia 19.037 14.8% 6.642 33.1% 12.395 6.9%
Netherlands 17.751 39.9% 15.828 47.4% 1.923 -1.4%

- General Administration of Customs