Xi admits ‘uncertainty’

President Xi Jinping sought to reassure Chinese entrepreneurs at a meeting yesterday 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.

Representatives from 10 companies addressed the meeting to give suggestions on how to support the development of private enterprises, Xinhua said. 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.