Asurvey conducted recently in china showed that in the last two years, investments in businesses increased by almost 75%. the same survey also concluded that people became wealthy by investing in businesses, and this motivated other people to invest more in their respective businesses. what most likely triggered this increase in investment? (a) faith in the economy(b)government orders(c)incentives(d)traditional customs(e)nextreset

The correct answer is C: Incentives.

China’s State Council announced US$6.59 billion worth of tax cuts for businesses and investors, hoping to reduce the burden on small and micro-enterprises, encourage investors to continue lending, and ensure capital flow in the economy. These tax cuts were for example:

On companies that have suspended production or business due to restructuring or cutting of overcapacity. They can have their real estate tax and land-use tax either reduced or exempted altogether.Investors in social security funds and basic pension funds can enjoy tax relief.Postal savings banks with large amounts of agriculture-related loans can pay a preferential value-added tax.Lenders to small and micro-enterprises can enjoy expanded value-added tax exemption on loans to such enterprises.Foreign institutions can exempt their corporate income tax and value-added tax on interest gains from onshore bond market investments.

Also, to boost foreign investments, China would cut import tariffs on 1,585 taxable items, including machinery, textiles, paper products, and construction materials.