Bloomberg Businessweek

E C O N O M I C S

27

Edited by

Cristina Lindblad

Bloomberg Businessweek March 11, 2019

NG HAN GUAN/AP PHOTO

○ Beijing reduces economic

growth targets while ruling out

“a deluge of stimulus”

President Xi Jinping, some wiggle room by setting

the official economic growth target for 2019 at a

range of 6 percent to 6.5 percent, down from last

year’s objective of about 6.5 percent.

Chinese policymakers’ acceptance of the econ-

omy’s inexorable slowdown—the lower bound of

the target range would be the smallest expansion in

almost three decades—was largely cheered by econo-

mists who warn anything faster would require exces-

sive stimulus and jeopardize the country’s long-term

financial stability. In days gone by, China’s leader-

ship would’ve responded to economic headwinds

with an all-out spending binge on roads, rail, and

whatever else could keep growth humming above

10 percent. China will “refrain from using a deluge

of stimulus policies,” Li said in his speech.

Li’s blueprint made it clear tax policy will become

a more important driver of growth in the year ahead.

His report outlined tax cuts worth almost 2 trillion

yuan ($298 billion) and pledged future reductions.

China needs to brace for a “tough economic bat-

tle ahead,” in the words of Premier Li Keqiang. It’s

a struggle on two main fronts. President Trump is

demanding that Beijing reduce support for state-

owned companies or face continued tariffs. At

home, the government must find a way to help strug-

gling private companies without adding to China’s

already enormous debt pile.

The plan to navigate those challenges was laid

out in the presentation of theReport on the Work of

Government, a ritual that marks the start of China’s

10-day-long legislative session. In his March 5 speech

before the National People’s Congress, Li, China’s

top economic official, gave himself and his boss,

China Slows

The Tempo

 A military band

conductor before

the National People’s

Congress