Beijing- China has lowered its economic growth target for this year. The second strongest economy in the world has moved on with strict reforms to deal with mounting debts and to establish a protection against financial risks.
China has an economic growth target of 6.5% and it is a realistic figure, said Premier Li Keqiang on Sunday in the opening of National People’s Congress (NPC) annual session.
In 2016, growth target ranged between 6.5% and 7% while the achieved growth was 6.7%.
Li said: “Developments inside and outside China require being fully-prepared to confront more complicated and dangerous conditions.”
He felt regret over the global economic recession and admitted the challenges facing the Chinese financial system from the debt that is 270% more than the GDP, to the huge increase in companies’ debts and the widespread shadow financing.
China has added 13.14 million new vacancies in cities in 2016 – number of university graduates who have found jobs or launched projects broke the record, as revealed by Li.
Economists see that it is difficult to achieve balance between supporting growth and maintaining liquidity and to move forward in reforms at the same time.
Li added that the risks are currently all under control but China should be attentive, protecting itself from financial risks. He continued that China will slash its steel production capacity by around 50 million tons and coal by at least 150 million tons this year.
On the contrary, China is unwilling to let go of its direct support to the economy even if this causes an increase in the deficit. It will invest EUR355 billion in railways, public roads and water courses.