[Economics] China's economy would face further downward pressure

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China's economy has slowed in recent months due to Beijing's push to slow growth in the real estate sector.

China's economy is facing further downward pressure and has to cut taxes and tariffs to address the problems faced by small and medium-sized enterprises, according to the country's Prime Minister Li Keqiang.

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Li did not specify the scope of the new "downward pressure" or its cause, but Chinese officials generally use the phrase to refer to a slowing economy. You've used the phrase before, even multiple times in 2019.

The economy needs "cross-cyclical adjustments" to remain in a proper range, Li said during a visit to China's main market regulator, state broadcaster CCTV reported. That phrase is associated with a more conservative fiscal and monetary approach that focuses more on long-term prospects than immediate economic performance.

China's economy has slowed in recent months due to Beijing's push to slow growth in the real estate sector. Li's comments came after new signs of weakness in October due to power shortages that hit the manufacturing sector and tight coronavirus controls that curbed Christmas spending.

 

The official manufacturing sector purchasing managers index fell to 49.2, the national statistics office reported on Sunday, corresponding to the second month below the key mark of 50, indicating a contraction in production.

Several investment banks have lowered their forecasts for China's growth in 2021 below 8% in recent weeks. However, former Chinese central bank adviser Huang Yiping told Bloomberg News on Tuesday that while China's economy will slow further in the coming months, annual growth of around 8% can be achieved.

Li called for the creation of a better business environment through equal treatment for all types of companies and better market supervision, citing efforts to combat monopolies, unfair competition and hoarding.

 

Link: https://www.elespectador.com/economia/macroeconomia/economia-de-china-enfrentaria-nuevas-presiones-a-la-baja/