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China will apply a series of economic stimulus measures to cope with the trade war declared by Donald Trump leaving aside for the moment the fight against indebtedness and the financial risks that threaten the world's second largest economy
Last week, the Beijing government finally acknowledged that the prohibitive tariffs imposed by the US president will have an impact on the growth of the economy. Chinese economy which, in the last quarter, slowed down slightly to 6.7%.
Faced with these "external uncertainties", the Chinese government met Monday under the coordination of Prime Minister Li Keqiang to adopt a series of fiscal and financial measures to stimulate domestic demand
This change of course has was greeted Tuesday by the exchanges of Hong Kong (+ 1.44%), Shanghai (+ 1.61%) and Shenzhen (+ 1.51%).
Asian Giant's Dilemma
The government announced a "more active" fiscal policy and will allow more companies to deduct from their taxes investments in research and development, said a statement released Monday.
China It will accelerate its so-called special bond issue rate to finance infrastructure projects in local governments for a total value of 1.35 billion yuan this year.
In addition, it will "step up its efforts" to grant annually credits worth 140,000 million yuan (17,000 million euros) to 150,000 small businesses. Private investment will also be favored in sectors such as transport, telecommunications, oil and gas.
"The Chinese government clearly states that it is ready to defend growth," said economists at the bank ANZ. However, China remains in the same dilemma, between supporting the economy at the risk of becoming more indebted or reducing debt, with the risk that it curbs growth.
AFP
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