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Beijing is offering tax concessions to high-tech companies in an effort to move mainland businesses up the value chainamid the economic slowdown.

The State Council announced yesterday that high-tech service providers

in 10 regions and five national-level industrial development zones would pay 15 per cent corporate income tax – compared to the 25 per cent paid by other businesses.

The cabinet also said more government guidance funds would be established to bolster the growth of high-tech service companies.

READ MORE: China’s tax cuts on imported goods ‘unlikely to significantly lower prices’

After a meeting chaired by Premier Li Keqiang (李克強), the cabinet said that the gloomy outlook for the world economy had dragged on mainland exports and prompted the government to bolster services to create a new engine for growth and generated jobs.

The State Council said the preferential tax policy would be implemented in 10 regions including Tianjin (天津), Shanghai, Hainan (海南), Shenzhen and Guangzhou as well as five industrial zones including one in northeastern Harbin (哈爾濱).

The move followed pledges by the premier in January to deepen tax reforms in an effort to ease the burden on businesses.

READ MORE: China’s Politburo approves tax cuts to boost growth

Last year, the world’s second-largest economy grew at a slowest pace in 25 years, putting pressure on the leadership to avoid a hard landing.

“Tax cuts are always the most powerful weapon to support business,” said Lin Caiyi, chief economist with Guotai Junan Securities.

“It remains to be seen whether more tax incentives will be rolled out.”

Li has been advocating entrepreneurship and encouraging well-educated youngsters to venture into their own businesses by making the most of fast-growing internet and mobile technologies.