China further 3% VAT cut to 10%

China is likely to announce this week that it will cut its main standard VAT rate from 13% to 10% this year. It has already reduced its VAT rate from 16% to 13% on 1 April 2019.

China’s economy is slowing rapidly, hit by a debt overhang, global slow down and the effects of US tariffs on Chinese products. Members of the National People’s Congress are likely to hear about the plan on Tuesday when the premier addresses their meeting.

The budget deficit target is said to be widened to 2.8 percent of GDP from 2.6 percent in 2018, and the quota for special bonds is said to be set to 2.15 trillion yuan, a significant rise from 1.35 trillion yuan in 2018.