China's government is attempting to boost spending and fuel sustainable economic growth though income tax cuts. Only 8 percent of Chinese will now pay income tax.
China fined Unilever more than $300,000 after the Anglo-Dutch firm said it might raise prices on toiletries and other products. The blunt response was designed to 'break ugly habits,' that distorted market prices, officials stated.
At this week’s annual National People’s Congress, top leaders have been stressing issues such as skyrocketing house prices, worrying inflation, and workers’ wages.
Beijing unpegged the Chinese yuan from the dollar last weekend, leading to a half-point rise against the US currency this week. The value of China's currency has been a highly contentious issue with trade partners.
Workers at Foxconn and Honda won hefty pay raises this week. Higher wages will help Beijing move China's economy away from relying on masses of unskilled workers and toward higher-value manufacturing.
China vaulted past Germany to become the world’s biggest exporter last month as its export, import volume jumped by 18 and 56 percent. The increases are a positive sign for global trade, especially for countries that sell to China.
Bank loans and state-led investment have reenergized the economy, and people feel more secure about their jobs. But the government has boosted spending so fast that economists are warning of stock and real-estate bubbles.
Like the 'Asian tigers' before it, China is pushing into higher-end manufacturing and innovation.
Beijing hopes stoking domestic consumption can boost its slowing economy. But convincing a nation of savers to spend more during hard times may be a tough sell.