China which is one of the fastest growing nations in the world is facing the stagnant growth rate due to which many manufacturing and small retail companies are having troubles with their businesses. However, senior Chinese officials said that they are going to reduces the taxes which will help small scale businesses. Currently, the china is facing lots of problems because recently the government announced that the country’s growth in export and import sector has declined by more than 5 percent due to which yesterday major Chinese stock indexes fell. There are lots of things which are causing the slow growth rate of China’s economy, and one of them is the trade war dispute with the USA.
So far, many large Chinese companies have lost millions of dollars of contracts because of the trade dispute. However, now the Chinese officials are thinking to solve that problem by lowering down the tax rates. The value of Chinese Yuan is also fluctuating on the international market because the American dollar is getting strong. China is trying to get into a currency swap agreement with other countries but not getting succeed at it also. However, this decision of reducing the taxes will somehow have a positive impact on the local Chinese businesses. In China, the majority of its economy depends upon the small scale businesses, and that’s why the Chinese officials have taken this step[of reducing the taxes which will help small scale industries.
In last year China’s economy grew at the lowest rate because of which the Chinese officials were forcing banks to lend more money to the vendor’s to restore the economy, but they failed at it. However, this time China decides to slash tax rates to please the local small scale businesses and now only time will tell whether this move will be helpful for the country’s economy or not.