China's blueprint to boosting economic growth has been unveiled by Chinese state media.<br />It's the usual mix of fiscal and monetary measures, including tax cuts for companies investing in research and development. <br />Ko Roon-hee explains. <br /> Amid its trade war with the United States, China has unveiled new measures to prevent economic slowdown by boosting domestic demand. <br /><br />According to China's state radio on Monday, Premier Li Keqiang announced at a cabinet meeting that the fiscal policy will become more active…and will focus on cutting taxes for companies that are spending money on research and development.<br />The Chinese government is expected to provide tax cuts of 9.6 billion U.S. dollars this year.<br /><br /> In terms of the monetary policy, the Cabinet said it will speed up the issuing of special bonds to finance local government infrastructure projects.<br />The government also promised loans for about 150-thousand small firms each year.<br /><br /> Meanwhile… The People's Bank of China set the yuan midpoint rate at 6-point-7891 against the U.S. dollar Tuesday…its weakest since July 2017.<br /><br />Although some say the yuan's depreciation is partially the result of Chinese policies, an economic expert says there are other external factors. <br /><br />"Because the U.S. economy is doing so well, there is a good chance that the Fed will keep raising the interest rates. And the interest rate differential between U.S. and China will also depreciate the yuan even without the efforts by China. So, I think the yuan depreciation is the result of policies from both countries…rather than due to just one country."<br /><br />This expert believes China aims to boost domestic demand and increase exports for overall economic growth. <br /><br />"GDP consists of domestic spending plus exports. And because the Chinese growth rate seems to be slowing down..it will be in their interest to increase both domestic expenditures and exports to maintain their GDP growth."<br /><br /> The moves come during the escalating trade conflict between the United States and China… which have so far imposed tariffs on 34-billion dollars worth of each other's goods.<br />Ko Roon-hee, Arirang News. <br />
