China’s businesses may save nearly $23 billion a year under new measures: think tank

BEIJING Companies in China may save up to 150 billion yuan ($22.5 billion) a year if they are allowed to contribute less to employees’ social security and housing plans, a research institute at the top economic planning agency said on Monday.

China aims to cut financing, labor, energy and logistics costs and reduce the annual tax burden for firms over the next few years, the government said last week, as policymakers try to offset the impact of a prolonged economic slowdown.

Businesses may save more than 100 billion yuan annually as the government moves to reduce the amount companies need to pay for employees’ social security policies, wrote Guan Bo, a researcher at the Social Development Research Institute, which is part of the National Development and Reform Commission (NDRC).

Businesses may save an additional 40 billion yuan a year as the amount they need to contribute to employees’ housing funds is reduced as well, Guan wrote.

Rising business costs have been cited by some economists as one of the reasons behind a sharp slowdown in private investment in China, which is leaving the economy more reliant on the bloated and more inefficient state sector.

($1 = 6.6740 Chinese yuan renminbi)

(Reporting by Sue-Lin Wong- Editing by Kim Coghill)