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Faced with trade war, President Xi Jinping admits ‘uncertainty’ in China’s economy

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Beijing : President Xi Jinping sought to reassure Chinese entrepreneurs at a meeting with promises to prop up private firms with lower taxes and more funding, as he acknowledged uncertainty in China’s economy.

Xi held the meeting amid signs that the world’s second largest economy is losing steam as it faces a trade war with the United States, a massive debt buildup and a weakening currency.

Though China’s overall economic status is stable, “uncertainty in our country’s economic development has clearly increased, downward pressure has grown, and companies are facing more difficulties,” said Xi, according to the official Xinhua news agency.

 

Xi, who has voiced his support for private firms multiple times this year, made several policy suggestions, including lowering corporate taxes and resolving funding challenges faced by companies.

He also proposed that provincial governments raise their own “rescue funds” to bail out companies.

Xi also emphasised creating a fair and competitive business environment and tasked local governments with “correcting” the behaviour of certain government departments, as well as large companies that use their dominance to “bully” smaller firms.

US tariffs on half of what China exports to the United States have sapped confidence in Beijing’s ability to maintain current growth levels.

Analysts say that the country’s overleveraged companies and local governments are likely to put a further drag on expansion.

It was the second meeting this week in which Chinese leaders vowed to protect the economy.

Xi presided over a conclave of the Politburo on Wednesday, with the leadership saying China had “achieved overall economic stability with steady progress” in the first three quarters but more work needed to be done to help the private sector.

A key indicator on Wednesday showed that Chinese factory activity slowed in October, the latest sign that the economy is losing momentum.

The Purchasing Managers’ Index (PMI) came in at 50.2 for the month, down from 50.8 in September, the National Bureau of Statistics said.

A separate survey calculated independently by the Caixin media group showed factory activity at 50.1 in October, up from 50 a month earlier, which had been its lowest level for 16 months.


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India one of world’s fastest growing large economies:IMF

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Washington: India has been one of the fastest growing large economies in the world, the International Monetary Fund (IMF) has said, asserting that the country has carried out several key reforms in the last five years, but more needs to be done.
Responding to a question on India’s economic development in the last five years at a fortnightly news conference here, IMF communications director Gerry Rice Thursday said, “India has of course been one of the world’s fastest growing large economies of late, with growth averaging about seven per cent over the past five years.”
“Important reforms have been implemented and we feel more reforms are needed to sustain this high growth, including to harness the demographic dividend opportunity, which India has,” he said.
Details about the Indian economy would be revealed in the upcoming World Economic Outlook (WEO) survey report to be released by the IMF ahead of the annual spring meeting with the World Bank next month, he said.
This report would be the first under Indian American economist Gita Gopinath, who is now IMF’s chief economist.
“The WEO will go into more details. But amongst the policy priorities, we would include accelerate the cleanup of banks and corporate balance sheets, continue fiscal consolidation, both at centre and state levels, and broadly maintain the reform momentum in terms of structural reforms in factor markets, labour, land reforms and further enhancing the business climate to achieve faster and more inclusive growth,” Rice said.

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Fitch cuts India GDP growth forecast for FY20 to 6.8 pc

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New Delhi: Fitch Ratings on Friday cut India’s economic growth forecast for the next financial year starting April 1, to 6.8 per cent from its previous estimate of 7 per cent, on weaker than expected momentum in the economy.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8 per cent, followed by 7.1 per cent in FY21,” Fitch said in its Global Economic Outlook. Fitch Ratings cut India’s FY19 GDP growth forecast to 7.2 per cent from 7.8 per cent on December 6.
The rating agency has also cut growth forecasts for FY20 and FY21 to 7 per cent from 7.3 per cent and 7.1 per cent from 7.3 per cent, respectively. According to Fitch, the RBI has adopted a more dovish monetary policy stance and cut interest rates by 0.25 percentage at its February 2019 meeting, a move supported by steadily decelerating headline inflation.
“We have changed our rate outlook and we now expect another 25 bp cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said. “On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers,” it added. Fitch said, it’s benign oil price outlook and expectations of accelerating food prices in the coming months should support rural households’ income and consumption.

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India’s total wireless subscribers grew to 1.18 bn in January 2019: TRAI

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New Delhi: India’s total wireless subscribers grew by 0.51 percent to 1,181.97 million (1.18 bn) in January 2019, as per a report by telecom regularor TRAI.
Total wireless subscribers (GSM, CDMA & LTE) increased from 1,176.00 million at the end of December 2018 to 1,181.97 million at the end of January 2019, thereby registering a monthly growth rate of 0.51 percent, the TRAI report said.
As on January 31, 2019, the private access service providers held 89.95 percent market share of the wireless subscribers whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.05%, the regulator said in its report.
The Wireless subscription in urban areas increased from 647.52 million at the end of December 2018 to 654.20 million at the end of January 2019, however wireless subscriptions in rural areas declined from 528.48 million to 527.77 million during the month.
The monthly growth rates of urban wireless subscription was1.03 percent and rural wireless subscription was 0.13%, the report said
The Wireless Tele-density in India increased from 89.78 at the end of December 2018 to 90.15 at the end of January 2019.
The Urban Wireless Tele-density increased from 155.48 at the end of December 2018 to 156.85 at the end of January 2019, however Rural Wireless Tele-density declined from 59.15 to 59.04 during the same period.
The share of urban and rural wireless subscribers in total number of wireless subscribers was 55.35 percent and 44.65 percent respectively at the end of January 2019.

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