Government’s reading on the growth rate last year was 6.9 percent, due to the expected of this year it seems like a dip on the economy is coming, which would be noticed around the global economy outlook.
The latest growth target would be the minimum Chinese leaders have said is required to achieve the official goal of doubling incomes per person from 2010 levels by 2020.
China cut its economic growth target for 2016 to a range of 6.5% and above compared to the just shy of 7% figure reached in 2015 and warned that this year’s economic difficulties may be worse.
China will target annual growth of no less than 6.5 per cent for the next five years as Premier Li Keqiang yesterday announced the highest budget deficit since 1976 in a “challenging” year ahead.
Delegates to the ceremonial legislature, which routinely endorses ruling party plans in near unanimous votes, praised the work report delivered by Premier Li Keqiang at Beijing’s Great Hall of the People.
The report listed a number of advantages, including a solid foundation laid by fast growth for years, hugely resilient economy, enormous potential, ample room for growth, new impetus provided by reform and finer macro-economic regulation.
But it also outlined a continued strategy to prop up growth with investment, promising 800 billion yuan ($122.9 billion) for railway construction this year and investment in road construction of 1.65 trillion yuan. An unexpectedly sharp downturn over the past two years has raised the risk of politically unsafe job losses and prompted Beijing to shore up growth with mini-stimulus efforts.
“…China’s economic output had exceeded 60 trillion yuan”.
The country will seek to “strengthen the military in all respects so that it is more revolutionary, modern, and standardised”, the budget report said.
With last year’s budget standing at $144 billion, an increase of 7 to 8 percent would take defense spending for this year to between $154 billion and $155 billion – still less than one-third of what the U.S.is proposing to spend this year. “Such steady growth is more sustainable”, it said. “Fiscal policies have yet to play a greater role, with the deficit ratio ready to expand”, it said.
“Of particular note, the employment situation overall remained stable, with 13.12 million new urban jobs created in 2015, surpassing the year’ s target and becoming an economic highlight”, Li said. He says the setting of a flexible growth target, along with cutting overcapacity and promoting the service industry, are part of the structural reforms the Chinese economy needs, and will help the country emerge from its economic slowdown in the long run.
A draft of the five-year plan, a blueprint for the country’s aspirations from this year through to 2020, said China would strengthen its capabilities in maritime law enforcement and “appropriately handle” infringements of its maritime rights, though it gave no details.
The premier also vowed to address capacity glut in steel, coal and other heavy industries as well as strictly control the expansion.
In a reflection of official sensitivity, a Chinese deputy finance minister on Friday retorted that Western models don’t apply to China. Policy makers also plan to push for injecting new life into the property market by seeking more mortgage lending, among other steps.
Chinese leaders are struggling to reassure the public and global markets about their ability to steer the world’s second-largest economy following a plunge in stock prices and currency turmoil.