China on Sunday set its GDP growth target at around 6.5 per cent for 2017, compared with a target range of 6.5 to 7 per cent last year as the world’s second largest economy braced for further slowdown of its growth.
“(China will) pursue better results in actual economic work,” according to the report by Chinese Premier Li Keqiang delivered to the opening ceremony of the annual session of China’s top legislature, the National People’s Congress, (NPC) setting the 6.5 per cent target.
The projected target is in line with both economic principles and realities, the report said, adding that it will help stabilise market expectations and facilitate the country’s structural adjustments.
It will also contribute to achieving the goal of finishing the building of a moderately prosperous society in all respects.
“An important reason for stressing the need to maintain steady growth is to ensure employment and improve people’s lives,” the report said.
China last year achieved 6.7 per cent GDP, the lowest in over 26 years slowing further down from 6.9 per cent in 2015.
Defending his move to fix the 6.5 per cent target, Li said it is important for China to maintain steady growth to ensure employment and improve people’s lives”.
This year’s target for urban job creation is over 11 million, up by one million from 2016, underlining the greater importance China attaches to employment.
China recently announced five lakh job cuts and promised to relocate those employees. Every year China produces over seven million graduates who join the job market.
“Considering our sound economic fundamentals and the capacity they bring for job creation, this target is attainable with hard work,” the report said.
Li said the Chinese economy registered a slower but stable growth. The GDP last year reached 74.4 trillion yuan (over USD 11 trillion) representing 6.7 per cent.
Presenting the work report at the opening session of the NPC attended by President Xi Jinping and top leadership of the ruling Communist Party and over 2,900 lawmakers, Li said China will pursue a more proactive and effective fiscal policy with government fiscal deficit projected to be three per cent of its GDP.
While the deficit-to-GDP ratio stays unchanged from last year, the government fiscal deficit volume is set at 2.38 trillion yuan (about USD 345 billion), a year-on-year increase of 200 billion yuan.
Li said China will push its drive to cut overcapacity in bloated sectors, with targets to slash steel production capacity by around 50 million tonnes and coal by at least 150 million tonnes this year.