China announces plans to stabilise growth amid trade war with US
Beijing: China is facing “downward pressures”, Premier Li Keqiang admitted Friday as he announced plans to boost market vitality with a new foreign investment law backed by tax cuts to stabilise growth in the world’s second largest economy amid a bruising trade war with the US.
China is targeting a GDP growth range of 6 to 6.5 per cent this year, down from 6.6 per cent in 2018 – the slowest pace in 28 years.
“The Chinese economy is indeed encountering new downward pressure but we will not allow our economic growth slide below the reasonable range”, Li told journalists at his annual press conference held at the end of the nearly fortnight long meeting of China’s Parliament, the National People’s Congress (NPC).
To meet the 6 to 6.5 per cent target, China will not resort to a “liquidity deluge” method of quantitative easing to stimulate the economy because it will bring serious side-effects, he said.
Li said China will further cut taxes and fees, simplify administrative regulatory procedures, facilitate market entry and foster new growth engines and fair competition environment to boost market vitality.
China has announced that it will cut a total of two trillion yuan (USD 297.5 billion) in taxes and corporate pension payments this year to ease financial pressure on enterprises.
He also projected the new foreign investment law approved by the NPC in shortest possible time could be a main driver of growth in future.
China will introduce a series of regulations and documents in accordance with the foreign investment law to protect the legitimate rights and interests of foreign investors, he said skirting question that whether it was passed in a hurry to meet the US demands to a end trade war.