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China’s premier acknowledges economic slowdown, promises tax cuts

A worker transported bottles of soymilk at a factory in Nanning in China's southern Guangxi region.
A worker transported bottles of soymilk at a factory in Nanning in China's southern Guangxi region.(STR/AFP/Getty Images)

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 has suggested that the government is indeed turning to monetary expansion and heavy infrastructure investments in an effort to stabilize growth.

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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.

“It is true that China’s economy has encountered new downward pressure,” he said in response to the first question asked. “We must take strong measures to cope with the current downward pressure.”

Li also tried to address concerns raised by the United States and some of its allies about whether Chinese tech companies like Huawei might use the equipment that they install overseas to gather intelligence for the Chinese government.

“This is not consistent with Chinese law, this is not how China behaves,” Li said. “We did not do that and we will not do that in the future.”

An hour before the news conference, the National People’s Congress approved a new foreign investment law, the main legislation before it this year. The Trump administration has pressed China for the past year to put foreign businesses on a more equal legal footing with their Chinese competitors.

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The law’s provisions “are still quite general and do not address a number of the persistent concerns of foreign companies or foreign-invested enterprises in China,” said Timothy P. Stratford, chairman of the American Chamber of Commerce in China and the managing partner of the Beijing office of the Covington and Burling law firm.