The State Council executive meeting held last week laid out measures to further expand employment, and urged governments at all levels to evaluate the impact on employment when formulating fiscal, taxation, industrial and other major policies.
The decision from the meeting made job creation an important factor in economic policies, sending out a strong signal of the nation’s attention on employment, said Zhang Bin, a researcher from the Chinese Academy of Social Sciences.
In recent years, employment has become one of the key tasks of fiscal and taxation policies. The nationwide value-added tax (VAT) reform, launched on May 1, 2016, became a catalyst for more jobs.
VAT reform has lowered costs for enterprises and enabled them to put more funds in research and development, an effective way to inspire entrepreneurship and promote employment.
While optimizing the economic and industrial structure, VAT reform has made important contributions to stable growth of the nation’s economy and employment.
From 2012 to 2016, the tertiary industry created new jobs for 60.67 million people, more than other industries.
In addition to direct drive to employment by tax cuts, fiscal and taxation policies also provide accurate support to startups and job creation, said Hu Yijian, an expert from Shanghai University of Finance and Economics.
In 2016, the government issued a number of tax policies to encourage innovation in all stages.
Besides tax reduction, fiscal policies also aim to expand investment, particularly the Public-Private Partnership (PPP), as a way to expand employment, said Bai Jingming, deputy dean of the Chinese Academy of Fiscal Sciences.
PPP could effectively drive up investment to allow private capital to play a role in job creation, Bai said.
In terms of capacity reduction, the central government has set up a special fund to support settlement of laid-off workers, according to Hu.
He added that there is still plenty of room for fiscal and taxation policies to further expand employment, such as providing subsidies to enterprises for employees’ social insurance and occupational trainings. “Governments can also stimulate employment by purchasing services.”