China’s financial commission denies tax cut rumour during key economic meeting
- Online claim said China’s leadership had decided not to cut taxes or fees during the ongoing Central Economic Work Conference
- One-sentence statement from the Financial Stability and Development Committee reflects Beijing’s eagerness to shore up fragile market sentiment
China’s powerful financial stability commission, led by Chinese President Xi Jinping’s top economic aide, on Friday publicly denied a market rumour that Beijing had no plan to cut taxes at this week’s key economic policymaking meeting.
The general office of the Financial Stability and Development Committee, which is located within the People’s Bank of China, said in a one-sentence statement that it has noticed online rumours about the ongoing Central Economic Work Conference and the talks that China’s leadership has decided not to cut taxes or fees “were contrary to the truth”.
It marked the first time the agency had reacted to a specific gossip, reflecting Beijing’s eagerness in stabilising market expectations.
It also showed that the government, which is fighting to keep a firm grip on economic information, is becoming more proactive in hitting back “rumours”.
Ding Shuang, chief Greater China economist at Standard Chartered, said it was an uncommon high profile clarification, given the high ranking of the financial stability committee.
“The stock markets, no matter in China or the US, are very weak now, and the confidence is at a low level, regulators might be afraid that such a rumour would cause a greater volatility,” he said.
The statement was published at 2.38pm on Friday when stock trading was on in Shanghai and Hong Kong, showing Beijing’s intention to shore up market sentiment.
China’s Shanghai Stock Composite Index had dipped below a key psychological level of 2,500 in early afternoon trading, but rebounded after the commission, which is headed by Chinese Vice-Premier Liu He, published their brief statement.