China targets slower GDP growth in 2019
China has targeted a GDP growth of 6.0-6.5% in 2019, down from the 6.6% recorded in 2018, stated Premier Li Keqiang on 5 March. Last year’s growth was the lowest in 28 years. However, it aims to contain consumer inflation levels of around 3% and generate more than 11 million new urban jobs during the year. Li, in his report at the second session of the 13th National People’s Congress said: “The projected targets represent our aim of promoting high-quality development and are in aligned with our current realities. Hard work is need for achieving those goals.”
There will be further cuts on taxes this year. Value added tax on manufacturing will be reduced to 13% from the present 16%, and the rates for transportation and construction will be lowered to 9% from 10%. “We will ensure that all industries will see lower tax burdens,” Li added. China, the world's second-biggest economy, is in the midst of a trade war with the US and has been since July 2018.
China will be unable to stimulate the economy to the same rate as it did in 2009-2017 because of the extent of existing bad debts. Its total household debt was US$6.58tn at the end of June 2018 – 50.3% of GDP, according to the Bank for International Settlements. But this is still a long way behind 76.6% in the US.
