The premier presented the working document for 2019 to the National People's Congress, which began today. Growth set at around 6-6.5%. Reduced taxes to boost domestic economy. Consistent budget growth in Military spending.
Beijing (AsiaNews) - China must be prepared to "fight hard battles" in the economy, Prime Minister Li Keqiang stressed this morning by presenting the working document on 2019 to the National People's Congress (NPC), which began today.
Li, almost quoting verbatim President Xi Jinping, said that there are risks and challenges that are "predictable and unpredictable" and that makes the situation "even more serious and more complex". For this reason, for 2019 the government has set a growth rate of between 6 and 6.5%: the lowest expansion since 1990.
But Li Keqiang reiterated that the global economy is under downward pressure. In addition, he admitted that the tariff war with the United States had a negative impact on trade and market expectations. In any case, China is addressing the problem in an "appropriate" way.
Aiding the domestic economy
To aid the domestic economy, the government will provide tax cuts in several sectors: a decrease of 3% in the manufacturing sector, bringing it to 13%; a reduction of taxes in the transport sector by 1%, bringing them to 9%. Other measures include less pressure on entrepreneurs to pay pensions, reductions in road and highway tolls, 10% reduction in electricity costs, 10% on the use of broadband, 20% in mobile phone costs.
All this will lead to a ratio between deficit and Gross Domestic Product of 2.8%, with a slight increase (0.2) compared to last year. The government deficit will be around 2760 billion yuan (about 411.5 billion dollars).
Among the other perspectives outlined by Li Keqiang, there are promises to create 11 million jobs, to keep inflation below 3% and to keep urban unemployment "around 5.5%". On the other hand, it is unclear how much unemployment is in the countryside, a source of migration and work force to the cities.
There was great emphasis on the forecast budget for the Armed Forces, which this year will grow by 7.5%. It is the fourth year in a row to register an growth of less than 10%, but it is likely that spending is always very high. The costs of army modernization create restlessness in the Chinese Sea given the tensions present with countries of Southeast Asia, the Far East, the USA.
According to the NPC spokesperson, Zhang Yeshui, last year military spending was