China Cuts Interest Rates, More Expected in 2H
The People's Bank of China, the nation's central bank, cut interest rates for the first time since 2008 as part of the effort to keep the faltering economy humming. The benchmark one-year deposit and lending rates have been lowered by 25 basis points to 3.25% and 6.31% respectively. Standard Chartered Bank predicted another two cuts, each of 25 basis points, in 2H 2012 as May data are expected to turn up weak and Europe's debt crisis drags on.
China to Revamp Consumption Tax
China's government will study measures to expand a value-added tax trial and improve consumption tax to stimulate spending, the Wall Street Journal reported, citing Finance Minister Xie Xuren. An experimental value-added tax program, already in place in Shanghai, is expected to be expanded to Beijing soon. Under the program, companies in certain parts of the service sector will shift from paying business tax, levied on total revenue, to a value-added tax, which will lower their overall tax burden. China currently sets a special consumption tax on certain goods including automobiles, liquor, cigarettes and luxury items. It also imposes a consumption tax on fuel including gasoline, diesel and jet fuel.
Investment in Railroads on the Mend
Investment in China's railway projects rose 16% month on month and fell 20.1% year on year to ¥33.77 billion in May, according to figures from the Ministry of Railways. Between January and May, the amount was down 46.9% year on year to ¥105.48 billion; the rate of decline slowed a bit from the first four months.
Online Gaming Revenue Rises 34% in 2011
Revenue from China's online gaming market grew 34.4% to ¥46.85 billion in 2011, according to the Ministry of Culture. The number of online game players increased 33% to 160 million.
$1 = ¥6.32