China's Government Is Warning That The Economy Is Slowing Down

Daniel Shane, CNN Business: China cuts taxes as it warns of 'a hard struggle' ahead

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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