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Chinese state media outlet, Xinhua, reported that China plans to take steps to accelerate integration of information technology and the manufacturing sector and the development of industrial Internet. This is according to a decision made by a State Council executive meeting chaired by Premier Li Keqiang.
The Government will create a favourable environment for the industrial Internet, with streamlined administration and fiscal support. According to Xinhua, market access for products and services in the field will be widened and companies will be encouraged to raise funds through social capital and innovative financial services.
Industrial enterprises would build cloud platforms to enable greater interconnectivity both within the firms and along the entire industrial value chain. The Government will boost support for Internet infrastructure, and offer faster and more affordable Internet connections to small and medium-sized enterprises (SMEs). SMEs will also receive support in uploading their business systems to the cloud platforms. This is expected to stimulate mass entrepreneurship and innovation.
While driving increasing interconnectedness among industrial systems, there will be a strong focus on cybersecurity as well. A report released by the National Computer Network Emergency Response Technical Team/Coordination Center of China (CNCERT) in April this year highlighted security risks associated with Internet-of-things (IoT) devices and networked industrial systems.
The State Council executive meeting also approved a draft on abolishing the provisional regulation on business tax and on revising the provisional regulation on value-added tax (VAT), as the country pushes the VAT reform that replaced all business taxes with value-added tax to cut corporate tax burden. VAT was implemented as the country’s only indirect tax in 2016, effectively replacing the business tax (BT) that previously applied to a number of industries. Previously, China’s indirect tax system was bifurcated system, with VAT broadly applying to the goods sector, and Business Tax (BT) applying to the services sector. This reform is part of Beijing’s efforts to shift the Chinese economy from one driven by labor-intensive manufacturing to a service-oriented one.