Trump effect: China slashes GDP growth target to 6-6.5%
Beijing: China will face a "graver and more complicated" environment to development, Premier Li Keqiang warned Tuesday as the world's second largest economy slashed its GDP target to 6 to 6.5 per cent this year, amid an ongoing trade war with the US and continued economic slowdown.
The lowered growth rate from the 2018 target of 6.5 per cent was proposed by Premier Li in his work report for this year at the annual session of the rubber-stamp Parliament, the National People's Congress (NPC).
Nearly 3,000 delegates from across China gathered in Beijing on Tuesday for the start of the annual session of the NPC.
Besides the trade war with the US, China is also haunted by the spectre of a continued economic slowdown. Last year, the economy, which is largely dependent on exports, slowed down to 6.6 per cent, the lowest in about three decades.
"A full analysis of developments in and outside China shows that in pursuing development this year, we will face a graver and more complicated environment as well as risks and challenges, foreseeable and otherwise, that are greater in number and size," Li said in the report.
"What we faced were severe challenges caused by the growing pains of economic transformation," he said, in an apparent reference to China's efforts to rejig its economy from export dependent to relying more on consumption.
Downward pressure on the Chinese economy continues to increase, growth in consumption is slowing and growth in effective investment lacks momentum, Li said, outlining the reasons for China's downward trend from the heyday of double digit growth in 2010.
"The real economy faces many difficulties," he said, adding that the issues related to providing accessible, affordable financing to small and micro business have not yet been effectively solved. Li said the business environment still fell short of market entities. "Our capacity for innovation is not strong and weakness in terms of core technologies for key fields remains a salient problem. There are many risks and hidden dangers in the financial and other sectors," he said in a frank assessment.
Li also spoke about the public dissatisfaction.
"There is still public dissatisfaction in many areas, such as education, healthcare, elderly care, housing, food and drug safety and income distribution," he said, referring to food and work safety scandals.
"The lessons these incidents left us with should never be forgotten," he said.
In order to rejig its economy, China is all set to pass a new foreign investment law in a hurry, providing an equal footing to investors abroad with that of local business with legal safeguards for IPR and technology transfer.
The draft law is aimed to meet the main demands of US President Donald Trump to end the trade war.
The draft foreign investment law will be submitted to the NPC, which began here on Tuesday, for review on March 8 and put for vote on March 15, NPC spokesman Zhang Yesui said on Monday.