China will step in to support private businesses and cut taxes to boost the slowing economy, Premier Li Keqiang said Wednesday. Growth in the world's second largest economy is flagging, dragged down by the trade dispute with the US, and growth should slip to 6.2 percent this year according to the World Bank. The slowdown complicates Beijing's efforts to cut debt levels and transition away from an economic model based on exports, manufacturing and investment to one more reliant on domestic consumption. In a meeting with senior officials and leading businessmen including Alibaba's Jack Ma, Li outlined measures to fight the "downward pressure on the economy".

"We need to further stimulate the vitality of the market," Li said, according to state news agency Xinhua. "This is an important support in the face of downward pressure and an important direction of reform," Li said. In recent years, China has moved in the opposite direction, with state-owned enterprises growing in importance and privately owned companies facing greater obstacles.

"We must focus on creating a relaxed and fair business environment and focus on helping enterprises, especially helping private small and micro enterprises solve their difficulties," Li said, according to Xinhua. He vowed to implement tax cuts, in a repeat of previous pledges made by other officials. "We must encourage the expansion of domestic consumption and take advantage of our massive domestic market," Li said, according to Xinhua.

Economic growth is a sensitive topic for the Communist Party, which has based its ruling legitimacy largely on delivering constant expansion and rising living standards.

Copyright Agence France-Presse, 2019