See also Page A3
“Our country’s development faces more and greater difficulties ... so we must be prepared for a tough battle,” Li said.
In 2016, Beijing will aim for an economic growth rate between 6.5-7 per cent, with a consumer inflation target of around 3 per cent and money supply expansion of around 13 per cent, according to a series of draft reports ahead of the opening of the 12-day parliament.
Many investors had been hoping China would post an aggressive target for fiscal spending to prop growth. But the draft goal of running a fiscal deficit equivalent to 3 per cent of GDP, while up from the previous year’s target of 2.3 per cent, still disappointed some who had hoped for a number closer to 4.
The reports provide a blueprint of China’s aspirations for the next five years across a range of sectors and measures. They show Beijing trying to strike a balance between holding up growth and restructuring underperforming industries, where so-called ‘zombie firms’ are responsible for much of the country’s corporate debt overhang left over from the 2009 stimulus.
Li said the country will create 10 million new jobs, address zombie firms through mergers, bankruptcies and debt deals, and hold the urban registered unemployment rate below 4.5 per cent in 2016. Weighed down by sluggish demand at home and abroad, industrial overcapacity and faltering investment, China’s economic growth slowed to 6.9 per cent in 2015.
Economists widely expect it to cool further to a still-healthy rate of around 6.5 per cent this year. But slower growth raises the spectre of social unrest, as the transformation from lowend manufacturing to high technology and services leads to rising structural unemployment. — Reuters