Made in China:Passenger vehicle,purchase tax cut reduction;Health care;Tongda/Wuliangye/Jahwa

On 15 December, China’s Ministry of Finance (MoF), State Administration ofTaxation, Ministry of Industry and Information Technology (MIIT) jointlyannounced that the purchase tax rate for PVs with engine size of less than 1.6Lwill be revised to 7.5%, effective 1 January 2017. In other words, the purchasetax rate for small engine cars will be raised from 5% in 4Q15-2016, but stilllower than the normal 10% rate applied in the past. Besides, the governmentalso stated that the tax rate would return to 10% on 1 January, 2018. In ourview, this helps to remove the overhang on when the stimulus policy will end,thus preventing excessive last-minute buying before stimulus expiration atyearend 2017E. (Vincent Ha