The value added tax for manufacturing was lowered from 17 to 16 percent on Tuesday, while the rate for transportation, construction, basic telecommunication services and farm produce was reduced from 11 to 10 percent. The government also unified the standard for small-scale taxpayers and returned the withholdings of value added tax of some industries. Beijing News commented on Wednesday:

The tax cuts have generated immediate effects. The price of gasoline and diesel dropped by 75 yuan ($12) per ton and 65 yuan per ton respectively, and the prices of some automobiles dropped by tens of thousands of yuan.

The tax cuts will amount to 400 billion yuan ($64 billion) this year. This will not only directly benefit enterprises, it will also have a chain reaction that will boost consumption growth.

Reducing the tax burden on enterprises is an important goal of the government this year, as it targets a crucial problem hindering the development of enterprises.

It should be regarded as part of the supply-side structural reform to boost production and drive up consumption's share in the economy.

Supply-side structural reforms have harvested obvious effects. Data from the National Bureau of Statistics show that the total retail sales of consumer goods hit 36.6 trillion yuan last year, up 10.2 percent from 2016. This is the 14th year that it has grown at a double-digit speed.

Consumption plays a fundamental role in driving economic growth. The robust growth of consumption will promote the restructuring of the national economy, and boost the development of the service sectors.