A new study from the Chinese Academy of Fiscal Science indicates that policy measures could be proving effective at tamping down the cost of financing and other production-related costs for enterprises in China.
The study, which surveyed nearly 15,000 enterprises during the period from March to July this year, found that the tax burden for companies had declined markedly in 2016, while financing costs had also eased significantly in some areas.
According to the study the share of enterprise tax in business revenue was 5.14% in 2016, for a 0.29 percentage point decline compared to 2015.
Companies surveyed also indicated that their overall financing costs had declined, with bank loan interest costs seeing an especially marked fall last year.
The weighted average interest rate for bank loans of various maturities fell from 7.026% in 205 to 6.489% in 2016, while equity finning costs fell from 1.627% to 1.423% over the same period.
Corporate bond yields saw a sizeable increase, however, rising from 4.288% in 2015 to 5.122% last year.
Chinese policymakers have sent repeated signals of late about the need for the financial sector to better service the real economy, as well as touted measures to shore up the financial inclusiveness of banks.
While tax burdens and financing costs may have eased for Chinese enterprise, the CAFS study points to rising costs for other factors of production, chief amongst them land and buildings.
When property developers and construction companies are excluded from the survey, CAFS found that land usage and building lease costs increased 9.7% year-on-year in 2016.
Labour and power costs saw increases of 6.84% and 2.91% respectively, while the share of logistics costs in operating costs rose from 2.8% in 2015 to 2.94% in 2016.