China warns growth slowdown will linger as it cuts foreign tax

City A.M. Reporter
CHINESE premier Wen Jiabao warned yesterday that the country’s economic growth was likely to remain slow for some time, but was still within expectations.

“At present, our country’s economic growth rate remains within the target range set earlier this year and we are seeing the effectiveness of stabilisation policies,” he said, speaking at a conference in Chengdu.

China’s latest GDP figures, released on Friday, showed the slowest rate of growth since the first quarter of 2009, with the economy expanding by 7.6 per cent in the three months to June.

A leaked government circular yesterday suggested that China is planning to encourage foreign investment in the country by cutting taxes applied to the profits of overseas companies by up to half.

Jiabao also promised that the government will step up efforts in the second half of the year to increase policy effectiveness and foresight.