The Chinese government announced it is slashing business taxes in order to prevent the economy from slowing down too sharply.
China is now forecasting growth of between 6% and 6.5% in 2019. That would represent a decline from last year’s 6.6% rate of expansion, which was already the country’s weakest annual growth in three decades.
Chinese Premier Li Keqiang explained why in a speech:
There has been a more complex and severe environment facing our country’s development this year.”
However, even the lower forecast left some economists skeptical, including these economists from Capital Economics:
Growth of 6% or above remains faster than what we think is achievable in practice.”