China cuts down official GDP growth target to 6-6.5% amid economic slowdown, trade war with US

Beijing: China has slashed its official GDP target to 6 to 6.5 percent this year as the world’s second largest economy grapples with the ongoing trade war with the US and a continued economic slowdown.

The lowered growth rate was proposed by Chinese Premier Li Keqiang in his work report for this year at the opening session of the annual session of the “rubber-stamp” Parliament, the National People’s Congress (NPC).

Besides the trade war with the US, China is also haunted by the spectre of a continued economic slowdown. Last year, the economy, which is largely dependent on exports, slowed down to 6.6 per cent, the lowest in about three decades. In order to rejig its economy, China is all set to pass a new foreign investment law in a hurry, providing an equal footing to investors abroad with that of local business with legal safeguards for IPR and technology transfer. The draft law is aimed to meet the main demands of US President Donald Trump to end the trade war. The draft foreign investment law will be submitted to the NPC, which began here on Tuesday, for review on 8 March and put for vote on 15 March, NPC spokesman Zhang Yesui said on Monday. The NPC is often regarded as a rubber-stamp parliament for its routine approval of the proposals of the ruling Communist Party of China (CPC). [caption id=“attachment_5243901” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] The NPC, with over 2,900 deputies and the advisory body – the Chinese People’s Political Consultative (CPPCC) – is holding its annual sessions in Beijing. The sessions would go on for the next 10 days. The new investment law providing a level-playing field to investors abroad with local investors with all rights is being passed by China in record time to work a deal with Trump’s trade war which is badly affecting Beijing. Trump, who declared the trade war last year, is demanding China to reduce the $375-billion trade deficit, provide legal protection for intellectual property rights (IPR), technology transfer and more access for American goods to Chinese markets. He has already increased the tariffs on over $250 billion Chinese exports to the US and threatened to extend tariffs on $200 billion Chinese imports to 25 per cent. Trump has extended the 1 March deadline to impose further tariffs on the rest of the Chinese goods. Both the countries are holding intense talks to end the deadlock. According to the other key data mentioned in Li’s speech to the NPC on Tuesday, China aims to maintain consumer inflation level at around 3 percent and create over 11 million new urban jobs. The surveyed urban unemployment rate is projected to stay around 5.5 percent, the registered urban unemployment rate within 4.5 percent. “The above projected targets are ambitious but realistic – they represent our aim of promoting high-quality development, are in keeping with the current realities of China’s development, and are aligned with the goal of completing the building of a moderately prosperous society in all respects,” the report said.

This year is the 70th anniversary of the founding of the People’s Republic of China. It would be a crucial year for China as it endeavoured to achieve the first centenary goal of building a moderately prosperous society in all respects, the report said.

“A full analysis of developments in and outside China shows that in pursuing development this year, we will face a graver and more complicated environment as well as risks and challenges, foreseeable and otherwise, that are greater in number and size,” the report said. “China is still in an important period of strategic opportunity for development and has ample resilience, enormous potential, and great creativity to unleash. The longing of our people for a better life is strong. We have the unshakable will and the ability needed to prevail over difficulties and challenges of any kind, and our economic fundamentals are sound and will remain sound over the long-term,” it said.