BEIJING — China’s premier said on Tuesday that his government would respond to an economic slowdown by cutting taxes, easing burdens on the private sector and giving markets a bigger role — diluting the heavily pro-state pronouncements and policies that critics have warned were scaring investors.
Calling 2019 a “crucial year” for China’s economy, Premier Li Keqiang, the second-ranking official in China after President Xi Jinping, laid out measures long supported by private businesses. Mr. Li’s annual report to the national legislature revived rhetoric about market solutions after the government faced growing criticism for favoring government initiatives and state-owned companies, squeezing out private enterprise.
“We will keep using market-oriented reforming thinking,” Mr. Li said in his report. “The government must act with resolve to hand matters it shouldn’t manage over to the market.”
But the specifics of his speech to the legislature did not go as far as domestic or foreign critics would have liked. And this year’s session of China’s Communist Party-controlled legislature, the National People’s Congress, underscored how much economic anxieties have come to dominate policy a year after Mr. Xi appeared politically indomitable.
The nearly 3,000 congress delegates meet once a year to loyally approve legislation, reports and budgets. Last year, Mr. Xi, who is also the party leader, used the meeting to entrench his power, pushing through changes to the Constitution that abolished a term limit on the presidency. That meeting also approved a broad restructuring of the government and established a new anticorruption agency.
But the triumphant glow of Mr. Xi’s victory last March has dimmed. Mr. Li echoed the somber tone of Mr. Xi’s recent comments about the year ahead, which is dotted with sensitive anniversaries — above all, 30 years since the armed crackdown of June 3-4, 1989, on pro-democracy protests centered on Tiananmen Square in Beijing.
Mr. Li made little mention of the trade frictions with the Trump administration. But he stressed the risks facing China.
“We will face a graver and more complicated environment, as well as risks and challenges,” Mr. Li said. “We must be fully prepared for a tough struggle.”
The Chinese economy has slowed sharply since summer, mainly because of tight restrictions imposed on lending a year ago to curb debt. The trade war with the United States has also damaged the confidence of businesses and consumers, making entrepreneurs less willing to invest in export factories and consumers less eager to buy big-ticket items like apartments and new cars.
“This was not a leadership that appeared strong and decisive with a clear vision,” said Elizabeth C. Economy, a senior fellow at the Council on Foreign Relations in New York and the author of “The Third Revolution,” which studied Mr. Xi’s years in power.
“看起来这不是一个有明确远见、坚强果断的领导层，”总部设在纽约的外交学会(Council on Foreign Relations)高级研究员易明(Elizabeth C. Economy)说。她著有研究习近平掌权年代的《第三次革命》(The Third Revolution)一书。
Besides slowing growth, she said, China’s leaders must contend with rising household debt, the failure of looser birth restrictions to slow the aging crisis and growing shortfalls in the pension system.
Mr. Li laid out how the government intends to turn around some of those problems.
He set an ambitious target for economic growth this year of between 6 and 6.5 percent. That allows for slightly slower expansion than last year’s target of about 6.5 percent. Growth of China’s gross domestic product for 2018 came in at 6.6 percent. Many Western economists are suspicious that Chinese statistics may overestimate recent growth, however.
The three main choices for maintaining high growth have been to further ramp up spending on roads, bridges, rail lines and other infrastructure; print more money and force banks to lend more; or cut taxes and deregulate.
The government has been slow to cut taxes or deregulate, preferring to maintain its revenues and control. But many tycoons want lower taxes. In his report, Mr. Li also said the government would reduce the burden on employers from social insurance and old-age insurance for workers.
“Tax cuts and fee reductions get right to the spot in tackling the pains and difficulties” currently troubling businesses, he said.
Mr. Li also promised to cut taxes a year ago. But economists believe that much of the effect of the nominal cuts was offset by stricter collection.
“The more tax we have, the heavier our burden will be when we go overseas and go into battle,” said Liu Hanyuan, the chairman of Tongwei Group, a conglomerate making everything from fish food to solar panels.
In the past decade, Beijing turned to huge, debt-fueled investments in infrastructure and big increases in the money supply each time that the economy appeared to be slowing more than the country’s leaders could tolerate. The infrastructure investments have given China one of the world’s finest transportation networks.
But many companies and local governments are now struggling to pay all the debt they have accumulated. Rapid increases in mortgages and the broader money supply have driven the prices of apartments skyward, far beyond what most young people can afford. Real estate prices have jumped more than tenfold in the past two decades in many towns and cities.
China’s leaders set out at the start of last year to reduce debt — only to find that the economy slowed markedly by June. In July, President Trump began in earnest a trade war with China. By autumn, business and investor confidence had plummeted, investment in new factories and other equipment was stalling, and car sales were in a nose dive.
The government responded this winter by again ramping up infrastructure spending and debt. A broad measure of debt known as total social financing posted a record jump in January.
Total debt has not come down the way Chinese officials hoped a year ago. But China has made progress by cracking down hard on the barely regulated shadow banking system, while encouraging a big increase in the sale of bonds by local governments and corporations.
Relying more on bonds now means a less opaque system that may be a little less prone to sudden financial panics. But it has exposed another problem: Most small and medium-size enterprises are not large enough or profitable enough to issue bonds. These enterprises create 90 percent of the new jobs in China, but the state-controlled banking system has long been reluctant to lend to them.
The annual work report by China’s premier, delivered in a very long speech in the Great Hall of the People, resembles in some ways the State of the Union address that the president of the United States delivers to Congress each year.
Mr. Li had little new to say about foreign policy or domestic political threats. But the proposed budget released at the same time as his speech revealed that China will continue to spend heavily to modernize its military, although at a slightly lower pace than last year. Military spending in 2019 would rise by 7.5 percent to about $178 billion, the budget showed. Last year, the military budget grew by 8.1 percent.
“The world today faces profound changes of a kind unseen in a century,” Mr. Li said in his speech.