China announces economic package

Tax breaks for the small and micro firms will be extended till the end of 2016, China's cabinet, the State Council, announced on Wednesday.

The State Council is also considering raising the tax threshold significantly above the current level of 60,000 yuan (just under 10,000 U.S. dollars). The statement that followed Wednesday's cabinet meeting said small and micro businesses are vital to employment and the market.

The cabinet decided in 2011 that any company with annual taxable income under 60,000 yuan will have its business income tax halved during 2012-2015.

Officials attending Wednesday's cabinet meeting also said China will improve macro-controls in 2014 with measures to stimulate enterprises, expand domestic consumption and boost employment. There will also be fiscal help to cope with unexpected challenges.

The cabinet will ensure railway investment is steady and construction fast. It is expected that 6,600 kilometers of new lines will be put into operation this year, which is 1,000 km more than last year.

A railway development fund will be set up and open to social investment. The fund's value is expected to reach 300 billion yuan, and up to 150 billion yuan of railway bonds will be issued this year. The government will encourage banks to fund railway construction.

Railways in central and western regions will be prioritized to expand investment, boost related sectors, and help urbanization.

Renovation of rundown communities in urban regions will be sped up and bonds sold to institutional investors to support renovation and municipal infrastructure.

Chinese Premier Li Keqiang said earlier the government aims to renovate or build more than 4.7 million homes for people living in makeshift shelters this year.