The National People’s Congress – China’s top legislature – has started reviewing a proposal granting power to the State Council – China’s cabinet – to slash or even scrap taxes on bank deposit interest, the China Financial News reported. The move comes as the government tries to draw heat out of the country’s surging bourses. Bank deposit rates are currently lower than inflation, encouraging savers to withdraw deposits to invest in stocks or other assets. It is hoped that removing the tax will make bank deposits more favorable and dampen speculation in the markets. The 20% tax was introduced in November 1999 following the Asian financial crisis, and since then the government has collected more than US$28.2 billion (RMB215 billion).

China’s industrial firms increased earnings 42.1% year-on-year in the first five months of 2007 thanks to strong economic expansion, the Economic Daily reported. National Bureau of Statistics figures show companies earned a combined US$118.5 billion (RMB902.6 billion) for the period. Industrial sales revenues surged 27.4% to US$1.86 trillion (RMB14.2 trillion). Chemical firms earned more than three times the profit for the corresponding period last year, and steel makers more than doubled profits. Construction materials manufacturers saw a 70.1% year-on-year profit jump. China’s economy grew 11.1% year-on-year in the first quarter, comfortably outpacing expectations.

The Shanghai Gold Exchange plans to work with the Industrial and Commercial Bank of China (ICBC) to launch gold bullion trading for individuals across the country in July, the Shanghai Financial News reported. Individual investors will be required to trade from a minimum threshold of 100 grams, which is worth around US$2,100 (RMB16,000) based on Tuesday’s prices. ICBC’s Shanghai Branch launched an individual gold trading pilot program in July 2005, but lowered the threshold from 1,000 grams to 100 grams last December to appeal to more traders. By last Friday, the bank had had 3,301 gold-trading accounts with a cumulated turnover of 7,557.6 kilograms. Gold is a traditional symbol of  wealth in China, and the country is the third largest gold consumer in the world. The Shanghai Gold Exchange – the nation’s only bourse for precious metal, trading platinum, gold, and silver – traded 1,249 tons of gold in 2006, up nearly 37.8% from 2005.