BEIJING – Chinese Prime Minister Li Keqiang acknowledged on Friday that the government must take stronger measures against the economic uncertainties facing the country this year.
At a press conference following the close of the annual session of the National People’s Congress, Li spoke of the importance of maintaining stable economic growth to promote long-term growth.
He expressed confidence that the Chinese economy will continue to play a stabilizing role in the global economic situation.
Li said that the downward adjustment in GDP growth forecasts – in 2018 it was projected to increase 6.5 percent but in the end GDP rose 6.6 percent while that of 2019 is predicted to come in at between 6 percent and 6.5 percent – is used to send a message of stability to the market.
He added that there would be significant growth that was indicative of China’s progress.
The 6.6 percent growth recorded in 2018 was the lowest since 1990 and proof of the economic slowdown faced by China.
As for the solutions offered by the government, Li spoke of energizing market players to cope with the slowdown.
In terms of taxes, one of the key measures of the communist regime for this year, Li reiterated that tax cuts will be of a greater extent this year, citing the figure of about 2 trillion yuan ($298 billion).
He explained that reducing a percentage point each year would not be enough for companies.
Li said that on April 1, measures to reduce value added tax will enter into force and, on May 1 there would be reduction of social security contributions, two factors that he considered to be the best methods to relieve the burden for companies.
Regarding the sustainability of this new fiscal policy, Li stressed that his government has calculated these figures properly with the aim of revitalizing the market to achieve more dynamic development.
He added that the government will reduce public service budgets and use tax reserves to cope with falling government revenues.
Li said the manufacturing sector along with small and medium sized enterprises are a major job creation source and these measures would relieve the fiscal burden on them, leading to more jobs.