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China's economy still faces downward pressure: premier

Kitco News

BEIJING (Reuters) - China’s economy still faces downward pressure and the government will counter it by deepening reforms and cutting taxes, state television quoted Premier Li Keqiang as saying on Wednesday.

The economy grew a steady 6.4 percent in the first quarter, defying expectations of a further slowdown, with factory output, retail sales and investment in March all growing faster than expected following a raft of stimulus measures.

“We are keenly aware that China’s economy still faces downward pressure,” Li said.

He called for greater confidence but said authorities should not underestimate the difficulties in the economy.

China will deepen reforms, cut red tape and implement large-scale tax cuts to help companies, Li said.

China’s central bank is likely to pause to assess conditions before making any further cuts in lenders’ reserve requirements, though its easing policy bias remains unchanged, policy insiders told Reuters.

Economists do not expect a sharp recovery in the world’s second-largest economy, as many private firms grapple with high funding costs, while external demand may weaken in the coming months as the global economy loses steam.

Reporting by China monitoring desk and Kevin Yao; Editing by Robert Birsel and Darren Schuettler

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