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China sets 2018 GDP target at around 6.5 per cent

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Beijing, Mar 5 : China today set its GDP growth rate for 2018 at around 6.5 per cent, unchanged from last year, as the world’s second largest economy aims to reduce risks to its financial system from a rapid build-up in debt.

While projecting a buoyant picture of the economy, Chinese Premier Li Keqiang in his annual work report to the National People’s Congress (NPC) exuded cautious optimism and refrained from increasing the growth target.

“The fundamentals of Chinese economy remain sound, and we have many policy tools at out disposal. We are fully capable of forestalling systemic risks,” 63-year-old Li said in his 45-page work report.

China, which is trying hard to reshape its economy from being a dependent on dwindling exports to the one relying on domestic consumption, is still deriving much of its growth on the massive infrastructure building expanding its existing well laid out rail, road and air next work.

Li said this year China will see 732 billion yuan (about USD 115.6 billion) invested in railway construction and around 1.8 trillion yuan invested in highway and waterway projects; the scale of investment in ongoing water conservancy projects will reach one trillion yuan, he said.

The central and western regions will continue to be the priority for major infrastructure construction, he said.

China will carry out a new round of major technology transformation and upgrading projects, he said.

The central government budget will earmark 537.6 billion yuan (over USD 86 billion) for investment in 2018, an increase of 30 billion yuan from the last year.

In his report, Li said China expanded its high-speed train network from 9,000 km to 25,000 km accounting for two thirds of the world’s total bullet train tracks in the last five years.

“Our expressways have grown from 96,000 to 136,000 kms. We have built and upgraded 1.27 million kms rural roads, built 46 new civilians airports and begun work on 122 major water connectivity projects,” he said.

He also said that China has completed latest round of rural power grid upgrading and put in place the largest mobile broadband network in the world.

He also promised to lower the rates of broadband network and abolish domestic data roaming charges. Rates for the mobile internet will be cut by 30 per cent to develop ‘Digital China’, he said.

To move away from cheap manufacturing to high end technology, he said, China will develop integrated circuits, 5G mobile communications, aircraft engines, new energy vehicles, develop internet of things of platforms and create Made in China 2025 demonstration zones.

Given China’s economic fundamentals and capacity for job creation, GDP growth of around 6.5 per cent will enable China to achieve relatively full employment, Li said in his report.

Chinese economy which is slowing down every year grew by 6.9 per cent last year.

China aims to maintain inflation level at around three per cent and create over 11 million new urban jobs. The surveyed urban unemployment rate is projected to stay within 5.5 per cent, the registered urban jobless rate within 4.5 per cent, the report showed, Li said in his work report.

The above targets take into consideration the need to secure a decisive victory in building a moderately prosperous society in all respects, and are fitting given the fact that China’s economy is transitioning from a phase of rapid growth to a stage of high-quality development, he said.

Today, China’s material and technological foundations are much stronger; its industrial system is complete, its market is vast, its human resources are abundant, and its entrepreneurs and innovators are dynamic, he said.

He also said China will actively expand imports this year as it aims to further open up its market.

To encourage imports, China will host the first China International Import Expo this year and lower import tariffs on products including automobiles and some everyday consumer goods, Li said in his work report.

“We will open our market wider to promote industry upgrading and more balanced development of trade, and to provide Chinese consumers with a broader range of choices,” he said.

China will also strengthen the fundamental role of consumption in driving economic growth while promoting effective investment in 2018, he said.

“We will support private actors in providing more services in healthcare, elderly care, education, culture and sports,” he said.

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