Bloomberg reports, citing a person familiar with the matter, saying that China is planning to cut the value-added tax rate that covers the manufacturing sector by 3% as part of measures to support the slowing economy.
The reduction could be announced as soon as this week, with the NPC set to begin tomorrow and carry on until next week. The 0.6% GDP boost is according to estimates by Morgan Stanley, who also estimated that the boost to the economy (cut amount) could be worth up to $90 billion.
If anything, this continues to show that Chinese authorities are still taking more proactive measures to support the economy and that they certainly won’t let it free fall. This should be a plus for risk assets if anything else.
