Business news for Sun, 23 Dec 2007 & with words billion+expected. 5 news.

CHINA is proposing to raise its monthly individual income tax levy threshold from the current 1,600 yuan (US$217.69) to 2,000 yuan, according to a draft amendment to the law on individual income tax. The threshold increase is to help medium- and low-income earners hit by the recent price increases of some goods. Yesterday, the draft amendment was submitted to the Standing Committee of the National People's Congress, China's top legislature, for deliberation. The amendment is expected to take effect from March 1. Finance Minister Xie Xuren told the legislative session that "raising the threshold of individual income tax collection from 1,600 yuan to 2,000 yuan means a reduction of 30 billion yuan in state revenue." The rise in the threshold would free 70 percent of income earners from paying income tax. The current threshold of 1,600 yuan exempts 50 percent of income earners from tax. Xie said: "The increase of individual income tax collection threshold is

CHINA'S national pension fund earned more than 100 billion yuan (US$13.6 billion) of returns this year, buoyed by rising stock markets, the agency said yesterday. The pension fund is expected to end this year with 500 billion yuan in assets, said Xiang Huaicheng, chairman of China's National Council for Social Security Fund, in Beijing. "We've earned magnificent returns this year, but everyone has," Xiang said. "The market's been crazy."

EUROPEAN stocks retreated last week on concern losses from the United States subprime-lending market are spreading through the region's broader economy. Vinci SA, the world's biggest builder, Ericsson AB and Anglo American Plc led declines of companies most affected by changes in the pace of economic growth. UBS AG, Europe's largest bank, and Barclays Plc fell after Goldman, Sachs & Co cut its recommendation on European banks. "We're maybe at the tip of the iceberg," said Franck Hennin, who helps oversee US$7.3 billion at Richelieu Finance in Paris. "The contagion from the US that we anticipated is becoming a reality. Many expected a year-end rally. Now the market is back-tracking." The Dow Jones Stoxx 600 Index fell 0.8 percent last week, led by construction and materials firms. The measure is heading for a 0.2 percent drop this year, weighed down by banks and financial-services companies on credit-markets losses, Bloomberg News reported. Goldman Sachs

UNITED States stocks rose for the third time in four weeks, led by energy companies, as higher consumer spending and the Federal Reserve's efforts to give cash to banks spurred speculation the economy will keep expanding. Exxon Mobil Corp and Hess Corp led energy companies to the biggest gain in the Standard & Poor's 500 Index after oil prices climbed for a second week. Earnings reports from Oracle Corp and Research In Motion Ltd drove technology stocks to the second-steepest advance among 10 industries. "You can just feel the tide turning here," said Jim Paulsen, who helps oversee about US$200 billion as chief investment strategist at Wells Capital Management in Minneapolis. "Economic data keeps coming in better than expected and I think it's part of the recovery story." The S&P 500 added 16.51, or 1.1 percent to 1,484.46 last week, bringing its year-to-date advance to 4.7 percent. The Dow Jones Industrial Average rose 0.8 percent to 13,450.65. The Nasdaq

AXA, France's largest insurer, has agreed to acquire a 36.7-percent stake in Reso-Garantia, Russia's second-largest insurance firm, for 810 million euros (US$1.16 billion). The investment is expected to add to Axa's earnings within three years, the Paris-based company said in a statement. The insurer will have the option to buy the rest of the company through calls exercisable in 2010 and 2011, according to Bloomberg News. Russia's Federal Anti-Monopoly Service gave Dresdner Bank AG, the banking arm of insurer Allianz SA, regulatory approval to buy a controlling stake in Reso on August 14. The next day, news service Vedomosti reported that Dresdner had decided instead to hold onto its Reso shares as collateral for a loan to its holding company. On May 29, Reso-Garantia said it will sell a 20-percent stake in the first public offering of stock by a Russian insurer. The European Bank for Reconstruction & Development said earlier that it was buying a 10-percent stake in