China has taken a series of significant actions in an apparent effort to rectify the country’s current economic worries. Beijing has lowered China’s growth target and has announced tax cuts, along with a slew of other measures.
The primary reasons for these actions are fears over trade and debt. The current U.S.-China trade war has taken a toll on the Chinese economy, with exports taking the hardest hit. Higher unemployment rates in China are also due in part to the country’s export situation. The trade war also comes amid growing concerns over China’s debt, which has been growing significantly for years and now stands at approximately 47.6% of its GDP.
Beijing announced that the country’s growth target has been reduced to 6-6.5%. There will also be a significant tax cut on the books, which is intended to help pull back from China’s recent deceleration. Going forward, China will have to balance measures taken to improve growth with measures taken in order to rein in debt. The current measures could potentially prove more useful than austerity measures, which have failed in all but a few of the countries that have employed them.
