The Chinese government approves stimuli to face the crisis

For 2019, the World Bank forecasts an overall growth of the Chinese GDP of 6.2% (at minimum levels in the last 30 years); other signs suggest a slowdown in economic growth: at the end of 2018 there was the first major contraction of Chinese industrial activity in the last two years and for 2019 a reduction in orders is expected both in the domestic market and in the international market (the commercial war with the United States is one of the main causes).

To cope with the economic contraction, the Chinese government has already planned the adoption of measures to support the economy: new railway projects have already been approved for about 125 billion dollars which will lead to an increase of 6,800 kilometers of new railway lines (40% more than 2018) of which 3,200 kilometers of high-speed lines.

In addition, the central bank has approved the release of new liquidity into the economy for the equivalent of 116 billion dollars through the leverage on cutting another percentage point of the liquidity reserves required for commercial banks.

The share of issuance of special local government bonds is also expected and the government is promoting the support of Chinese banks to small and medium-sized enterprises.

With the beginning of 2019, the tax reform on individual income came into force: with this reform, Chinese government also aims to increase consumption and ease the tax burden on lower incomes.