HSBC economists Qu Hongbin and Julia Wang believe China’s corporate tax reductions of 2 percent of projected 2019 gross domestic product are the biggest in a decade. Those cuts and other measures will trigger a self-sustained recovery.
Banks and the IMF are forecasting stronger GDP growth in China.
The stimulus measures include cuts in taxes and fees worth 2 trillion yuan ($297.73 billion).
HSBC sees China’s GDP growth hitting 6.7 percent by the fourth quarter and predicted it will push the figure for the full year to 6.6 percent.
Previous stimulus packages were focused on infrastructure spending but these tax cuts are for the crucial non-state sector. Non-state companies make up more than 80 percent of employment in urban areas and over 70 percent of GDP.
They believe rising private investment will help 80 percent of urban consumers.
US Treasury Secretary Steven Mnuchin said US-China trade talks continue to make progress and the two sides have basically settled on a mechanism to police any agreement, including new enforcement offices. Enforcement of the trade deal was seen as one of the biggest remaining challenges to getting a US-China trade deal.
SOURCES- CNBC, Bloomberg
Written By Brian Wang. Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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Nothing can stop the coming Chinese recession because it is a consequence of growth. Growth has been protecting bad businesses for decades. Only a recession can root them out and restore vitality to the Chinese economy.
In other words, another bailout of the banks. The SOE banks are by far the biggest chunk of corporate tax revenue. Given the banks “forget” to record loans that will never be repaid, it makes perfect sense to let them improve “profits”. Circle jerk.
Good to see optimistic bluster coming from Chinese government mouthpieces for a change. Out with the gloom and doom. In with triumphalism ascendant!
More debt for China … nothing to see here … move along … or you will be reported.
But! But, according the official Libtard Line of the Democrat Party USA, this is all ‘trickle down’ economics that won’t work! Gasp! Tax cuts for the rich!
How could this be!