BEIJING: Chinese Premier Li Keqiang warned Sunday the world’s second-largest economy faces severe challenges, signalling a further deceleration as he announced a trimmed 2017 GDP growth target of “around 6.5 percent.”
The economy is already growing at its slowest rate in more than a quarter of a century and the latest target unveiled at the opening of China’s rubber-stamp parliament is lower than a 6.5-7.0 percent range he set last year.
Full-year growth in 2016 came in at 6.7 percent, the weakest since 1990.
“In the past year, China’s development has faced grave challenges posed by a great many problems and interwoven risks and dangers both at home and abroad,” Li said in his annual state-of-the-nation speech to the National People’s Congress (NPC).
China aims for “GDP growth of around 6.5 percent, or higher if possible,” he said, despite even “more complicated and graver situations” this year.
The target is below expectations and indicates authorities will prioritize risk-control over short-term growth.
The NPC gathers thousands of delegates from across China to Beijing’s vast Great Hall of the People and is touted by the ruling Communist Party as proof that it answers to the people despite its monopoly on power.
China is trying to pivot from hyper-fast growth based on investment, heavily polluting industries, and exports towards a steadier consumer-driven model.
China’s “systemic risks are under control. But we must be fully alert to the buildup of risks,” Li said.
Li’s report also set an inflation target of “around 3 percent.”
‘No to Taiwan independence’
The premier’s lengthy address touched on a broad range of other key national issues and included a pledge to maintain the stability of the yuan currency and cut severe air pollution.
Li said China would “resolutely oppose” any moves towards Taiwan independence.
US President Donald Trump had riled Beijing by signalling support for Taiwan – which Beijing claims as its own – and opposition to the expanding Chinese presence in the South China Sea, though the US rhetoric has softened lately.
Jean-Pierre Cabestan, a professor at Baptist University of Hong Kong, said the 6.5 percent growth target “sounds rather optimistic.”
“But the economic risks won’t prevent Xi Jinping from continuing to consolidate his power and put his own men in top positions,” Cabestan said.