China’s Manufacturing Incentive Policies
With COVID-19 resurgences causing unexpected challenges, the Chinese government has taken proactive steps to assist manufacturers in recovering from the adverse effects.
In the first quarter of 2022, China's tax authorities provided tax and fee deferrals for 333.5 billion yuan (USD 50.4 billion) to micro, small and medium-sized manufacturing firms nationwide. Tax payment deadlines have also been extended by six months.
In the meantime, the nation is planning to issue VAT credit refunds on a larger scale in 2022, with priority to be given to micro and small firms and the manufacturing sector.
As of mid-April, China's VAT credit refunds had reached 527,000 taxpayers totalling 420.2 billion yuan.
Moreover, the Chinese government has taken measures to ease supply chain congestion and help factories resume production following the COVID-19 disruption. To this end, China is creating a "white list" of key industries and supply chains, simplifying logistics for companies working in key sectors such as automobiles and integrated circuits.