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China signals more support for economy
BEIJING, Dec 22, 2018 (BSS/AFP) – China’s top policymakers Friday
signalled more support for the economy next year with tax cuts and other
policy measures as a bruising battle on debt and a trade war with the US have
weighed on growth.
The meeting headed by President Xi Jinping also pledged further opening of
the economy, better protection of intellectual property rights and to push
forward trade negotiations with Washington.
The outcome of the annual Central Economic Work Conference, during which
leaders review past policy and plan for the upcoming year, was published by
the state news agency Xinhua.
Economic data has shown China’s economy slowing this autumn, with Chinese
consumer spending growing at its slowest pace in 15 years during November and
factories easing up on production.
Xi and US President Donald Trump agreed to a 90-day tariff truce this
month, as the two sides try to find a more permanent solution to the trade
dispute.
Trade frictions with the US have been “handled steadily”, the statement
said.
“We must implement the consensus reached in Argentina between the Chinese
and US heads of state and push forward economic and trade negotiations,” the
readout said.
Comprehensive opening up is listed as one of the seven major tasks for
next year — but critics say Beijing has long promised much while delivering
little.
Beijing will work to relax market access, protect the legitimate rights
and interests of foreign businessmen in China, especially IP rights, and
allow them to operate independently in more areas, Xinhua said.
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CHINA-US-ECONOMY-POLICY 2 LAST BEIJING
– ‘Larger tax cut’ –
China’s top officials hammer out their broad plans for the next 12 months
during the three-day closed-door meeting.
Besides Xi, the entire Politburo standing committee, and top leaders from
every province and region attended, Xinhua said.
China would “continue to implement a proactive fiscal policy and a prudent
monetary policy,” the statement said.
The meeting pushed for more fiscal measures and “a larger tax cut”.
Beijing has already put in place one round of tax cuts for the middle and
lower class this year.
Still the trade row with the US has sapped market confidence, dragging
down Chinese equities and the yuan.
Policymakers said they would increase the scale of local government bond
issuance and solve financing problems for small and medium enterprises.
The world’s number two economy expanded at its slowest pace for nine years
in July-September and analysts expect full year growth to slow further next
year.
The meeting said China would “keep the economy running in a reasonable
range,” next year.
China’s leaders are battling to stabilise the economy, transforming it
from one fuelled by exports and state investment to one that relies on
domestic consumption.
Leaders will work to “enhance spending power, let the people eat with
ease, dress satisfactorily, and use things comfortably,” Xinhua said.
Policymakers indicated they would continue to push deleveraging and handle
local government debt risks.
“We must do a good job in preventing and resolving major risks,” the
statement said.
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