China’s leaders have admitted that the country is in the throes of an “economic downturn” after pledging to increase measures to stimulate growth next year.

The powerful Central Economic Work Conference wrapped up on Friday with policymakers signaling more measures to ease pressure on an economy weighed down by the war on debt and the trade conflict with the United States.

“While fully acknowledging the achievements, we must see that there are new and worrisome developments,” the official statement released by the state-run Xinhua news agency, said.

“The external environment is complicated and severe, and the economy faces downward pressure,” it added.

Still, it described the problems as part of China’s overall economic “development” and said that this would be an “important period of strategic opportunity.”

To put the economy back on track, significant “cuts to taxes and fees” will be rolled out in 2019 although monetary policy will remain “prudent,” the statement confirmed.

“Policymakers see the Chinese economy facing bigger downward pressures and an increasingly challenging external environment”

Policymakers believe this will strike an “appropriate” balance as they continue to deal with “financial risks,” such as corporate and local government debt.

In the past few months, data released by the National Bureau of Statistics has painted a bleak picture with manufacturing activity declining and consumer spending shrinking.

Moreover, new car sales have stalled while tighter credit restrictions have squeezed an already cooling property market.

“Policymakers see the Chinese economy facing bigger downward pressures and an increasingly challenging external environment,” Wang Tao, the head of China economic research at UBS in Hong Kong, told Bloomberg.

“As a response, the work conference sent more and more specific easing signals, and said they want to push harder on reforms and support the private sector,” Wang added.

Easing credit for small- and medium-sized business will become a priority, as well as boosting employment, increasing investment and curbing financial market volatility, Xinhua reported.

To reverse the slowdown in growth during the past few months, President Xi Jinping’s government had launched a raft of policy measures, including a reduction in banks’ reserve requirements to stimulate lending, tax cuts and fast-tracking infrastructure projects.

This three-pronged attack looks set to continue into the new year.

“The pro-active fiscal policy should enhance efficiency, implement larger-scale tax cuts and fee reductions, and substantially increase the size of local government special bonds [which will boost infrastructure spending],” the statement said, according to Xinhua.