China reels under economic slowdown, lowers GDP target to 6.5 percent

Beijing: China on Saturday lowered its growth target to 6.5 per cent for this year as the world’s second largest economy reeled under continued economic slowdown which last year slipped to below 7 per cent, the lowest in 26 years. China’s economy, which grew 6.9 per cent last year, was within “an appropriate range,” Premier Li Keqiang said in his work report for this year submitted to the annual session of parliament, the National People’s Congress, which opened here on Saturday. [caption id=“attachment_2658358” align=“alignleft” width=“380”]  Representative image. Reuters[/caption] Last year, the world’s second largest economy grew by 67.7 trillion yuan in 2015. In dollar terms, however, it is about USD 10.4 trillion, marginally above the over USD 10 trillion in 2014 due to steady depreciation of the Chinese currency against US dollar. Presenting his report to over 2,200 lawmakers of the NPC which is often described as the rubber stamp parliament for its routine approval of the decisions of the ruling Communist Party of China, Li said the Chinese economic growth is faster than that of most of other major economies in the world. He said the target for this is set at 6.5 per cent to 7 per cent. The growth in the 13th five year plan to be implemented from this year is set at 6.5 per cent as average for the next five years. President Xi Jinping earlier directed officials to ensure that the GDP should not go below 6.5 per cent amid fears that the slowing down economy may be heading for hard landing. Li said that in 2015, China’s grain production grew for the 12th year in a row. Consumer price index, a main gauge of inflation, increased 1.4 per cent year on year, a six-year low and well below the official 3-per cent target. Amid reports that five to six million workers faced layoffs due to the economic slowdown, Li’s report said the employment situation is stable. Officials said over 1.8 millions workers faced retrenchment in the coal and steel sectors along. The 2.3-million strong military too announced three lakh troop cut this year. “Of particular note, the employment situation overall remained stable, with 13.12 million new urban jobs created in 2015, surpassing the year’ s target and becoming an economic highlight,” Li said in his work report. He said that despite the slowdown his government has successfully fulfilled all the main tasks and targets set out in an economic and social development road-map for the 2011-2015 period. The NPC session which was opened with lot of fanfare with number of members from ethnic minorities turning up in colourful dresses is covered by over 3,500 journalists including over 1,000 foreign journalists. Xi along with members of the seven-member Standing Committee, the highest body of the ruling of the CPC which governs China, attended the session. It was telecast live all over the country. Striking an optimistic tone for the implementation of the next five-year plan, Li said China has made impressive achievements in its development in the 12th Five-Year Plan period, defying a “complicated international environment” and “challenging tasks of carrying out reform and development and maintaining stability at home.” In particular, China has sustained a high rate of economic growth in the five years and secured milestone progress in structural adjustments, he said. China’s GDP grew at an average annual rate of 7.8 per cent in the five years between 2011 and 2015. The enviable growth made China the world’s second-largest economy, and the largest trading nation in terms of goods as well as a major outbound investor, Li said. Meanwhile, service industries grew to be the largest economic sector in the country, while consumption became a major driver of growth, he said. Energy consumption per unit of GDP dropped by 18.2 per cent, and the emissions of major pollutants were cut by over 12 per cent. Li also pointed to across-the-board infrastructure improvements and major breakthroughs in scientific and technological innovations. Achievements were made in popular undertakings such as manned space flight, lunar exploration program, and deep-water explorations, as well as the less known researches on quantum communications, neutrino oscillation, and iron-based high-temperature superconductivity. He went on to commend improved living standards and notable social developments, which saw urban-rural income gap narrowed and basic health insurance expanded to achieve complete coverage. More than 100 million rural residents were lifted out of poverty, and over 300 million rural residents gained access to safe drinking water, Li said. The government said recently that China still has over 70 million below the poverty line, mainly in remote areas. “China’s soft power continued to grow. The rule of law was advanced in all respects. Significant achievements were made in the military revolution with Chinese characteristics,” Li said. The NPC meets every year for a fortnight to transact legislative business. PTI