With tax cuts for corporate jerks to Beijing against the expected weaker economic growth this year. China needs to prepare themselves economically for a “tough battle”, said the head of government Li Keqiang on Tuesday for the opening of the National people’s Congress in Beijing. He announced billion in relief for businesses, defence expenditure is to lower rise than 2018. In the trade dispute with the United States, the government has dampened hopes for a quick solution.
The gross domestic product (GDP) in the second largest economy in the world will grow this year between 6.0 and 6.5 percent, said Li. In the past year, the economy grew, according to official figures by 6.6 per cent – the lowest figure for almost three decades.
The economic development is influenced by a “more challenging and more complex environment,” and ever-larger “risks and challenges”, said Li in front of around 3000 delegates. In the last quarter of 2018, the GDP grew by 6.4 percent, many provinces cut this year, with their forecasts. Industrial production fell in February to the lowest level in three years.
Li announced to lower taxes and social levies for companies in the amount of two trillion Yuan (260 billion euros). The VAT on capital goods should be reduced from 16 to 13 percent, in the sectors of transportation and construction, will be nine instead of ten percent.
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Minister of Commerce Zhong order dampened the hope of a rapid solution to the trade dispute
At the same time to increase the budget deficit this year by 0.2 percentage points to 2.8 percent of GDP. The defence expenditure is to rise by 7.5 percent to the equivalent of 156 billion euros. In the past year, China’s defense budget had grown after the USA the second largest in the world – even by 8.1 percent. The stock markets in China reacted positively to the announcements: The commercial place in Shanghai, the castle of 0.88 percent in the Plus, in Shenzhen, there was an increase of 2.28 percent.
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nevertheless, attributed to the end of the trade dispute between China and the USA heavily on the companies of the country and its investment decisions. Li said negotiations with Washington would continue to be driven forward.
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Minister of Commerce Zhong Shan dampened, however, hope for a speedy solution. The dealer would still do “very much”. During the Washington visit of the Chinese Chief negotiator Liu He, the negotiations had been “very difficult and tiring”. The National people’s Congress meets for approximately two weeks and is expected to adopt at this time a bunch of laws. Including a law on foreign investment in China, to be facilitated. (AFP)
