Joseph Tse, Taxation Managing Partner at Deloitte & Touche China, told China Business News that stable fiscal revenue is a precondition for tax cuts.

"When fiscal income shows signs of declining, the government is least likely to cut taxes for the sake of the fiscal deficit," Tse said.

Property Market Revival

The government issued a package of policies to boost citizens' enthusiasm for buying property in a bid to prevent a subprime mortgage crisis like the one in the United States. Real estate investment is one of the largest contributors to urban fixed-asset investment and has propped up a variety of related businesses such as cement, iron and steel productions and home appliance industries.

The latest figures from the NBS indicate that property prices in 70 medium-sized and large cities grew 3.5 percent in September year on year, the lowest growth rate so far this year. The data also show that citizens' willingness to buy property dropped to its lowest since last year.

Property developers urged the government to step in, arguing that their sales had plummeted because of the stringent monetary policy adopted last year.

Immediately after the State Council held its fourth-quarter economic work conference on October 17, the Ministry of Finance said it would slash the property transaction tax rate to 1 percent from the previous 3-5 percent as of November 1 for people buying their first home if their apartments were smaller than 90 square meters. The ministry also dropped the 0.05-percent stamp tax and land value-added tax for home purchases.

The Central Government also allowed local governments to enact further measures to boost the property markets in their areas.

Property developers and potential buyers applauded the moves. But some experts still argue that the government should not "revive" the property market, because prices in most cities remain high. Yi Xianrong, a finance researcher at the Chinese Academy of Social Sciences, said in a statement that the country's property market on the whole was still prosperous, and investment in real estate was still growing rapidly.

Property developer Zhang Baoquan in Beijing was even more optimistic. "Even if the property market takes a downturn, average property prices in China will not decrease," he said. "In the long run, it will not be possible for home prices to fall."

Propping up Exports

China raised export tax rebates for 3,486 items, or about one quarter of all its goods sold abroad, to counterbalance the export slump that has forced many export-oriented companies out of business.

The State Council, Ministry of Finance and the General Administration of Taxation jointly announced they were increasing the export tax rebates for some labor-intensive, high value-added and hi-tech products.

Export tax rebates on clothing and textiles, and toys will be raised to 14 percent, from 13 and 11 percent, effective November 1.

Last year, the government adopted a series of measures to rein in ballooning exports and cool down the sizzling economy. But the global economic downturn this year has hit Chinese exports hard. Thousands of low margin, labor-intensive factories such as toy manufacturers have closed down, leaving large numbers of workers jobless in the country's export-oriented coastal areas. The slowdown in exports caused the decline of GDP growth rate in the third quarter, prompting the government to readjust its policies again.

ABC Primed for Listing

The Agricultural Bank of China (ABC), the weakest of the "big four" state-owned commercial banks, said it has completed its financial restructuring and is ready to be listed on the mainland stock market in the second half of next year.

Pan Gongsheng, Vice President of ABC, said at a press conference on October 22 that after the financial restructuring, the bank's core capital adequacy ratio reached about 8 percent of the minimum requirement for a listed commercial bank, and it reduced its non-performing loan ratio to about 4.1 percent.

ABC received a massive cash injection of nearly $19 billion from Central Huijin Investment Co., an investment arm of the government, to cover the bank's bad debts, which have resulted from its past "policy loans." Central Huijin and the Ministry of Finance will each take a 50-percent stake in ABC. Pan said ABC would not invite other investors before it completed its transformation into a shareholding bank.