China lowers growth target for 2019

Noura Tan, Business and Policy Intern

China has revised its GDP growth target and announced a major tax cut as policymakers grapple with a debt problem and the ongoing trade war with the US.

The government announced a growth target range of 6 to 6.5 per cent for 2019 at the opening of the National People’s Congress in Beijing on Tuesday. This marked a downward revision from a hard target of 6.5 per cent over the past two years. Growth of 6 per cent would mark the slowest expansion rate in almost three decades.

Noting that the external environment remains uncertain, Premier Li Keqiang warned Congress that China needs to brace for a “tough economic battle ahead”, Bloomberg reports. Li noted that the government will not be rolling out a massive stimulus package, but nonetheless announced support for manufacturing and small and micro businesses with tax cuts and a reduction in firms’ contributions to social insurance schemes, as reported by the Straits Times.

The quota for issuing bonds aimed at funding infrastructure was also raised, indicating that spending on new projects will be an important source of growth, according to the Financial Times.