China is slashing business taxes as it tries to stop its economy from slowing down too sharply.
The Chinese government on Tuesday predicted economic growth of between 6% and 6.5% in 2019. That's a decline from last year's 6.6% rate of expansion, which was already China's weakest performance in three decades.
"There has been a more complex and severe environment facing our country's development this year," Chinese Premier Li Keqiang said in a speech. "There are greater expected and unexpected risks and challenges, and we have to make full preparations for a hard struggle."
Li announced the growth target, which is in line with most economists' forecasts, at the start of this week's annual meeting of the National People's Congress, China's rubber-stamp parliament. He also unveiled a slew of new measures intended to bolster the economy, including cuts in taxes and other charges that he said would save businesses nearly 2 trillion yuan ($298 billion) a year.
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WNU Editor: The current business tax rate in China is 25%, and the individual progressive rate ranges from 3% to 45% (see here for more info on China's tax rates). If these proposed tax cuts are implemented, it will significantly boost the economy.
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