Chinese Premier Li Keqiang said government budget deficit in 2019 is expected to widen to 2.76 trillion yuan, or around 2.8 percent of gross domestic product, partly due to greater fiscal support to the economy.
Chinese Premier Li Keqiang said on Tuesday that risks threatening the world's second-largest economy may warrant"stronger mitigating action" as growth is expected to slow further this year.
"The many risks and potential problems that have built up over the years demand stronger mitigating action, but in doing so we need to observe objective laws and take the right approach," said Li, according to the official English version of his prepared remarks. In addition, Li announced plans to increase the country's infrastructure financing: Around 2.15 trillion yuan worth of local government special bonds will be issued this year to meet spending needs for key projects. A special bond is a type of debt asset, which Beijing created after an earlier crackdown on non-bank lending, so projects such as railways and roads can still secure funding.
Analysts have largely expected China to cut taxes as the ongoing trade war takes a toll on its economy. Last year, Beijing cut taxes and fees worth 1.3 trillion yuan and allowed local governments to issue 1.35 trillion yuan in special bonds to fund key projects.
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