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Economy

China bolsters domestic market to soften trade war blow

Tax cuts and infrastructure boost likely as Politburo aims to spur demand

People walk past a Subway sandwich store at Sanlitun Soho residential and commercial complex in Beijing. China will focus on strengthening domestic demand.   © Reuters

BEIJING -- China's ruling Communist Party set a goal of expanding its domestic market in a meeting chaired by President Xi Jinping on Thursday, as the trade war with the U.S. clouds the economic outlook.

The party should be "prepared for potential adversities," the Politburo agreed at a session to discuss economic policy for 2019. The meeting called for moves "to cultivate the strength of the domestic market" and "push forward rural vitalization," which likely signal fresh tax reductions and infrastructure spending ahead.

Beijing's commitment at a summit earlier this month with U.S. President Donald Trump to increase imports of American agricultural goods and energy has created pressure to build up domestic demand.

The party's economic management for 2019 will likely revolve around providing support for growth and job creation.

China should "speed up economic reform and all-around opening up," the state-run Xinhua News Agency reported, citing a statement issued after the meeting.

China's top decision-making body said efforts should continue next year to tackle the "three tough battles" of controlling risks, reducing poverty and tackling pollution.

The Politburo statement added that the ruling party should "improve its ability to lead economic work," according to Xinhua.

Specific goals for economic management in 2019 are to be laid out this month at the annual Central Economic Work Conference, which includes central government ministries and agencies, regional governments and executives from state-owned businesses.

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