BEIJING, (APP/AFP): China on Saturday
cut its growth target for this year to a range of 6.5
to seven percent.
Premier Li Keqiang told the opening of the
National People’s Congress (NPC) parliament, that this
year’s growth target was “6.5 percent to 7 percent”.
Li struck a deeply realistic tone, cataloguing
the impact on the country’s outlook of weak trade
growth, fluctuations in commodity and financial
markets, and rising geopolitical risks.
“China will face more and tougher problems
and challenges in its development this year, so we
must be fully prepared to fight a difficult battle,”
he said, adding that the government would increase
deficit spending.
“Downward pressure on the economy is growing,”
Li said.”Domestically, problems and risks that have
been building up over the years are becoming more
evident.”
Li’s nearly two-hour speech to serried ranks
of delegates was punctuated by regular bursts of polite
applause, and the sound of thousands of sheets of paper
turning simultaneously each time he finished reading
a page.
Audience member Zhao Jiajun, a doctor from Shandong
province in the east, called the speech “fairly pragmatic”,
adding it “touched on many problems”.
– ‘Market expectations’ –
=========================
Premier Li said that authorities would make much-needed
cuts to overcapacity in the steel, coal, and “other industries
facing difficulties”.
State-owned enterprises, many of which are plagued by
inefficiencies and overcapacities, will be prompted “to make
structural adjustments”, he said, with some reorganised,
merged, or forced to exit the market.
China is attempting a difficult transition from
dependence on exports and investments to consumer-led
growth, seen as slower but more sustainable.
Nevertheless, Li said that this year, central
government investment spending would rise to 500 billion
yuan ($77 billion), while nationwide spending on railway
construction would exceed 800 billion yuan and road-building
would top 1.65 trillion yuan.
China’s leaders have sought to reassure global markets
in recent weeks with a unified message that authorities still
have monetary and fiscal policy tools in their arsenal to
keep the economy from further slowdown.
Li projected a government deficit for 2016 of 2.18
trillion yuan, 3.0 percent of GDP, up from 2.3 percent last
year.
A three percent level has long been seen as a red
line by authorities, but Li noted that such a ratio was
lower than in other major economies.
China was also targeting consumer inflation of
around 3 percent and unemployment within 4.5 percent, he
added, and pledged reductions in releases of some
major pollutants.
Li did not give a specific target for trade,
which fell last year, only aiming for “a steady rise
in import and export volumes” and “a basic balance
in international payments”.