China’s 2019 GDP could slow to 6.3%: report
Government will use positive fiscal policies to counter downward pressure on the economy, including tax and fee cuts and increased bond issuance
The Chinese government is likely to set a GDP growth target between 6 to 6.5%, while GDP could actually grow by 6.3%, Yicai.com reported, citing a study published by the Guanghua School of Management at Peking University.
The government will use positive fiscal policies to deal with the ongoing downward pressure on the economy, including further tax and fee cuts and greater bond issuance, which will directly boost infrastructure investment.
Local government bonds this year will reach a scale of 4.7 trillion yuan, of which the special bond limit will exceed 2 trillion yuan.
Meanwhile, monetary policy is also expected to be moderately loose. The central bank could cut the reserve requirement ratio by 2 points this year, but it is unlikely to lower the benchmark deposit and lending rate.
China and the US are expected to reach a temporary tariff arrangement, but there will be frequent friction and conflicts, as long-term competition between the two super powers continues.
The yuan is also unlikely to fall below the “psychological 7 level” against the US dollar, the report said.