China resorts to fiscal policy to stimulate slowing economy

China says it plans more fiscal stimulus while maintaining prudential monetary policy

Chinese premier Li Keqiang

China will implement more expansionary fiscal policies to prop up its sagging economy, while maintaining “prudential monetary policy”, Chinese premier Li Keqiang said during the annual meeting of China’s parliament on March 5.

China will cut value-added tax for the manufacturing sector to 13% from 16%, as the sector has been heavily impacted by the trade disputes with the US. Li also said the finance ministry will raise the special bond issuance quota for local governments to 2.15 trillion yuan

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