China’s premier notes slowdown
BEIJING — China’s premier delivered on Friday the clearest acknowledgment yet from a top Chinese official that the country’s economy is slowing and faces a series of difficulties.
Li Keqiang, who as premier is China’s second-highest official after President Xi Jinping, said at his annual news conference that the answer lies in cutting corporate taxes and deregulation, and not a return to the strategy during previous downturns of printing money and ramping up government spending. However, recently released economic data suggest that the government is indeed turning to monetary expansion and heavy infrastructure investments in an effort to stabilize growth.
Li also became the most senior Chinese official to try to allay foreign worries that Chinese technology companies spy on other countries at Beijing’s request, saying that this has not happened and will not. He appeared to be addressing concerns that the United States and some of its allies have been raising about Huawei, the Chinese technology giant.
Li delivered his acknowledgment of the slowdown at an annual meeting with foreign and domestic reporters that the Chinese leadership often uses to outline its priorities to its people and the world. Li and past premiers have sometimes used the event to offer reassurances that Beijing is tackling problems in an orderly way.
“It is true that China’s economy has encountered new downward pressure,” he said. “We must take strong measures to cope with the current downward pressure.”
As one example he cited the government’s sharp cuts in corporate taxes, particularly for manufacturers, which were unveiled March 5. But he also tried to ease concerns that have spread since then about whether the tax cuts would lead to much wider government deficits. Li said that the government would demand that the state-owned banking sector and the country’s many state-owned enterprises turn over a greater share of their profits to Beijing.
An hour before the news conference, the National People’s Congress approved a new foreign-investment law, the main legislation before it this year. President Donald Trump’s administration has pressed China for the past year to put foreign businesses on a more equal legal footing with their Chinese competitors.
China’s legislature made some tweaks to the law before passing it, notably to exhort Chinese government agencies to do a better job of protecting corporate trade secrets. But foreign business groups — which have long complained that Chinese officials and companies force them to give up their trade secrets in order to do business in China — say the new law still does not go far enough.