China's economy grew 7.4 percent last year, roughly in line with the government's growth target of around 7.5 percent but still the slowest in 24 years. (Pic shows a worker weldding at a construction site in Yiliang, Yunnan province, February 28, 2015. - REUTERS
BEIJING: China on Thursday announced an economic growth target for this year of around 7 percent, signaling 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.
"The downward pressure on China's economy is intensifying," Li told around 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 ($2.74 trillion) in 2015, an increase of 10.6 percent on 2014.
That will mean increasing the budget deficit to 1.62 trillion yuan, or around 2.3 percent of GDP, compared with 2.1 percent last year.
INDUSTRIAL REFORM
Li said China would push ahead with reforms of state-owned enterprises and move to liberalize its banking system and financial markets, as it seeks to restructure its economy to boost consumption at the expense of exports and investment.
"In order to defuse problems and risks, avoid falling into the 'middle income trap', and achieve modernization, China must rely on development and development requires an appropriate growth rate," said Li.
"At the same time, China's economic development has entered a 'new normal'."
China's economy grew 7.4 percent last year, roughly in line with the government's growth target of around 7.5 percent and robust by global standards, but still the slowest in 24 years.
With deflationary pressures mounting in China - annual consumer inflation fell to a five-year low of 0.8 percent in January - Li said the government would also lower its 2015 inflation target to around 3 percent from 3.5 percent in 2014.
A key plank of China's reform agenda is overhauling its industrial sector by tackling overcapacity in polluting heavy industries and moving manufacturing up the global value chain.
"Manufacturing is traditionally a strong area for Chinese industry," said Li.
"We will implement the 'Made in China 2025' strategy, seek innovation-driven development, apply smart technology, strengthen foundations, pursue green development and redouble our efforts to upgrade China from a manufacturer of quantity to one of quality."
With Communist Party leaders ever mindful of social stability, Li said China aimed to create more than 10 million new jobs in 2015 and would ensure the jobless rate does not exceed 4.5 percent.
While focusing heavily on the economy, Li also vowed to fight pollution and corruption, two highly sensitive topics that have become lightning rods for public discontent.
"Our tough stance on corruption is here to stay," he said. "Our tolerance for corruption is zero, and anyone guilty of corruption will be dealt with seriously."- Reuters
Earlier report
BEIJING: China's Premier Li Keqiang said the world's second largest economy would target growth this year of around 7 percent, signaling the lowest expansion for a quarter of a century.
In remarks prepared for delivery at the opening of China's annual parliamentary meeting in Beijing, Li vowed to fight corruption and pollution, and stressed the need for more painful reforms to support the economy in the longer term.
The premier said China faced greater economic headwinds this year than in 2014.
"The downward pressure on China's economy is intensifying," said Li.
"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 the country faces this year.
With the ultimate goal of restructuring the economy to boost consumption at the expense of exports and investment, Li said China would push ahead with reforms of state-owned enterprises and move to liberalize its banking system and nascent financial markets.
On corruption, a problem President Xi Jinping has vowed to fight, Li said the battle would not end.
"This year we will push forward the rule of law," he said. "It is also a crucial year for stabilizing growth and restructuring the economy."
With Communist Party leaders ever mindful of social stability, Li said China aimed to create more than 10 million new jobs in 2015.
China's economy grew 7.4 percent last year, roughly in line with the government's growth target of around 7.5 percent but still the slowest in 24 years.
With deflationary pressures mounting in China - annual consumer inflation fell to a five-year low of 0.8 percent in January, breaching the government's warning line of 1 percent - Li said the government would also lower its 2015 inflation target to around 3 percent from 3.5 percent in 2014.- Reuetrs
China's parliament, the National People's Congress, opens its annual session on Thursday.
Following are highlights from Premier Li Keqiang's prepared speech to be delivered at the start of the meeting, as well as highlights from reports from the Ministry of Finance and the National Development and Reform Commission.
WORK REPORT FROM PREMIER LI KEQIANG ECONOMY
- China to target economic growth of around 7 percent in 2015.
- Consumer price inflation target put at around 3 percent.
- Budget deficit for 2015 set at 2.3 pct of GDP.
- M2 growth target put at around 12 pct.
- China aims to create 10 million new jobs in 2015.
- To ensure jobless rate does not exceed 4.5 pct this year.
- Says economy faces greater difficulties in 2015 vs 2014.
- To improve local government debt-raising mechanism.
- To deepen reforms of state-owned enterprises.
- To implement proactive fiscal, prudent monetary policies.
- To cut carbon intensity by at least 3.1 pct.
REPORT FROM NATIONAL DEVELOPMENT AND REFORM COMMISSION
- Says 2015 FDI will be $120 bln.
- Sees non-financial outbound direct investment at $113 bln.
- To target total trade growth of around 6 pct in 2015.
- To target fixed-asset investment growth of 15 pct.
- To replace coal usage with alternative energy sources in heavily polluted areas
- Will encourage more mergers, shut outdated capacity in oversupplied sectors.- Reuters
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