China economy faces greater difficulties: Li

The government will expand domestic consumption and use effective investment to support growth this year, while opening manufacturing and services to foreign investors, Li said in his remarks meant for the opening of the important annual meeting of parliament. 

China aims to keep average annual economic growth at or above 6.5 percent in the next five years. It will increase the contribution of the services sector to its economic growth in the next five years. 

China’s 13th five-year plan is a blueprint for economic and social development between 2016 and 2020. The final version will be approved by the parliament in the next two weeks. It will allow more private investment into its banking sector, improve the mechanism for its interest rate and exchange rate markets, and improve operation and management of its foreign exchange reserves. China will stabilise its economic policy stance, improve communication with the market and improve transparency and predictability of policy.

China has increased its defence budget by 7.6 per cent to USD 146 billion for this year, citing militarisation of the Asia-Pacific, especially the disputed South China Sea, and deepening tensions with the US.The increase is the lowest in defence spending in six years in the wake of economic slowdown. China’s GDP growth last year declined to the lowest in 26 years to 6.9 per cent. 

China will build a second railway connecting Tibet with other parts of the country, expanding its connectivity with the Himalayan region and increasing its strategic options to rapidly move troops to the borders with India. 

The railway will be built between Tibet Autonomous Region’s capital city Lhasa and Chengdu, capital of Sichuan Province, in southwest China, according to the draft outline of the 13th Five-Year Plan (2016-2020).