Economics
China Faces an ‘Impossible Challenge’ on Budget, Tax and GDP
- Off-book special bonds issuance will increase to 1.35 trillion
- CICC says augmented deficit ratio may rise to 4.1% of output
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China is attempting to pull off an unusual fiscal feat: Cut taxes, boost spending and shrink the deficit, all with a slowing economy.
Premier Li Keqiang on Monday announced the first budget deficit goal reduction since 2012, to 2.6 percent of gross domestic product from 3 percent. He also pledged tax cuts of 800 billion yuan ($126 billion) for companies and individuals and set a 6.5 percent annual economic growth target -- the same as last year’s target but slower than the actual performance of 6.9 percent.