China’s leaders have unveiled a mini-stimulus aimed at shoring up sputtering growth in the world’s No. 2 economy.
Under the measures announced by Premier Li Keqiang, small businesses will get bigger tax breaks, social housing will be built to replace shantytowns and railway construction will be sped up.
Li, China’s top economic official, announced the new measures on Wednesday evening after a regular meeting of the State Council, China’s cabinet.
It comes as signs mount that China’s economy continues to slow, raising fears it may expand less than the 7.5 percent that the country’s leaders have targeted. Factory data released earlier this week showed that business conditions in the first quarter remained mostly weak. China’s economy has been decelerating after a decade of double-digit growth as its communist leaders try to shift the economy’s focus to domestic consumption instead of trade and investment.
The stimulus announcement “means policymakers don’t want to take the risk of seeing growth slipping to below 7 percent,” HSBC economists Qu Hongbin and Sun Junwei said in a report. “The government is clearly signaling that it intends to follow up with real policy actions to maintain growth.”
China’s growth rates remain high compared with the recent sluggish standards of Western nations, but last year’s expansion of 7.7 percent was the slowest in two decades.
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