China says will step up fiscal spending this year to support economy

The government may unveil more fiscal stimulus during the annual parliamentary meeting in March, including bigger tax cuts and more spending on infrastructure projects, economists say.

china, chinese economy, xi jinping, revenue, gdp, fiscal spending, finance ministry, debt, beijing, world news, indian express news — Local governments and state organizations should find a balance between stabilising growth and fending off risks, controlling the pace and intensity of such policies, President Xi Jinping warned. (AP/PTI Photo)

China will step up fiscal spending this year to support its economy, focusing on further cuts in taxes and fees for small firms, finance ministry officials said on Wednesday.

Mounting pressure on the world’s second-biggest economy pushed growth last year to its lowest since 1990 even as Beijing stepped up stimulus measures and spurred banks to lend more.

The government may unveil more fiscal stimulus during the annual parliamentary meeting in March, including bigger tax cuts and more spending on infrastructure projects, economists say.

China’s fiscal spending rose 8.7 per cent to 22.1 trillion yuan ($3.3 trillion) in 2018, while revenue increased 6.2 per cent to 18.3 trillion yuan, said Li Dawei, an official at the finance ministry.

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China achieved its 2018 fiscal revenue target despite extensive tax cuts last year, Li added.

Beijing delivered about 1.3 trillion yuan of cuts in taxes and fees in 2018. Finance Minister Liu Kun said this month that China will further lower taxes and fees this year. The government is also studying a plan to reduce social security fees to lighten the burden on small companies, Liu said. Policy insiders also expect Beijing to cut the value-added tax, which ranges from 6 per cent for the services sector to 16 per cent for manufacturers.