The Chinese economy continues its moderating trend and growth is expected to moderate further to 6.2 percent in 2019 from 6.6 percent in 2018 due to structural adjustment, deleveraging, and headwinds from the trade war with the U.S. The U.S.-China trade war has become one of the major risks for the Chinese economy, putting downward pressures on confidence, exports, and growth. Strengthened policy efforts on deleveraging have helped reduce domestic risks to financial stability compared to 2017. Notwithstanding the progress, some pockets of risks have become more prominent. Against the above backdrop, macroeconomic policy has become more challenging with the urgent need to cope with headwinds from the trade war and its impact on growth, together with efforts to maintain macroeconomic and financial stability, and pursue further reforms.