Premier Li Keqiang signals China’s ‘new normal’ with lower annual growth target
He tells NPC that government has set growth target this year of about 7pc - below last year’s 7.5 pc - will create 10 million new jobs and continue fight against pollution and corruption
China announced today an economic growth target for this year of about 7 per cent, signalling its lowest rate of expansion for a quarter of a century, and said it would increase government spending to support the slowing economy.
Speaking at the opening of China’s annual parliamentary meeting, Premier Li Keqiang vowed to fight corruption and pollution, and stressed the need for more painful reforms to put the world’s second-largest economy on a more sustainable footing after three decades of breakneck growth.
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“The downward pressure on China’s economy is intensifying,” Li told about 3,000 delegates gathered at the Great Hall of the People to the west of Tiananmen Square in the heart of Beijing.
“Deep-seated problems in the country’s economic development are becoming more obvious. The difficulties we are facing this year could be bigger than last year. The new year is a crucial year for deepening all-round reforms.”
The opening of the annual full meeting of the largely rubber-stamp National People’s Congress comes less than a week after China cut interest rates for the second time in three months, underscoring the growth challenges faced this year.
Grappling to sustain an economy weighed down by a cooling property market, high debt levels and excess factory capacity, Beijing plans to lift government spending to 17.15 trillion yuan (about HK$21.5 trillion) this year, an increase of 10.6 per cent on last year.
That will mean increasing the budget deficit to 1.62 trillion yuan, or about 2.3 per cent of gross domestic product, compared with 2.1 per cent last year. Li said China would push ahead with reforms of state-owned enterprises and move to liberalise its banking system and financial markets, as it seeks to restructure its economy to boost consumption at the expense of exports and investment.