China to slash taxes, boost lending to shore up slowing economy

China to slash taxes, boost lending to shore up slowing economy

Mr. Xi and other Chinese leaders have announced changes over the past year including tariff cuts on imported consumer goods and plans to allow full foreign ownership in auto manufacturing.

China's economy outperformed the official 2018 goal of "around 6.5 percent" by expanding 6.6 percent.

"China does not export revolution, hunger or poverty and does not interfere in other countries internal affairs".

Fiscal policy will be "proactive", while monetary policy will remain "prudent", Li said, outlining cuts to the reserve ratios at medium and small banks to unleash more funds into the economy.

According to the plan, Chinese inflation will accelerate to about 3 percent this year from 2.1 percent in 2018.

The 2019 defense budget will be 1.19 trillion yuan (about 177.61 billion U.S. dollars), figures from the report show.

Shadow banking risks will be resolved in an orderly way, and China will steadily deal with local government debt risks, the NDRC said.

Seeking to defuse USA and European complaints the Chinese system is rigged against foreign companies, Premier Li Keqiang promised in a speech to the National People's Congress they will be "treated as equals" with their Chinese competitors.

The rate marks a fourth straight year for the budgeted growth rate to dip into the single digit since 2016, following five consecutive years of double-digit increases, official news agency Xinhua reported.

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To support growth, Li said China would closely monitor employment at exporting companies heavily exposed to the United States market and cut Value-Added Tax for the manufacturing sector to 13 percent from 16 percent.

China has set its GDP growth target at 6-6.5 percent for 2019, according to a government work report available to the news media ahead of the annual legislative session on Tuesday.

A confrontational China-US relationship does not benefit anyone because the interests of the two countries are deeply interwoven, Zhang Yesui, spokesman for the annual session of the National People's Congress, said in Beijing on Monday.

Military reforms are almost complete, and "China needs the money to be used for more urgent matters", he said.

This year, the Work Report has attracted extra attention given China's slowing economy and ongoing trade war with the US. In 2018, 17 provinces set lower targets.

"Against the backdrop of mounting downward pressure on the economy, the policies and measures we adopt should ensure stable expectations, stable growth and structural adjustments", Li said.

The employment rate is one alternative indicator to GDP growth that economic planners have put added emphasis on in recent months due to its importance for maintaining social stability.

Separately, China's top banking regulator said on Tuesday that Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector.

But in signs that tensions from the tariff battle could soon ease, sources tell CNBC that the USA and China are now in the "final stages" of a trade deal that could end this month.

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