China sets 2018 GDP target at around 6.5 per cent

China today set its economy growth rate for 2018 at around 6.5 per cent, which is the same as last year, as the country started its annual parliament session.

The session attended by over 2,900 delegates was regarded significant at it is set to endorse the constitutional proposals to remove two term limits for President and Vice President.

The removal of the term limit is widely speculated to enable President Xi Jinping to continue in office as head of the ruling Communist Party of China, (CPC), Chief of the military and the largely ceremonial Presidency possibly for life.

Xi along with the top leadership of the CPC attended the NPC session at the Great Hall of People which will last for about two weeks.

After the ceremonial opening, Premier Li Keqiang readout his annual work report outlining government's achievements last year and targets for this year.  

Given China's economic fundamentals and capacity for job creation, the 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 has registered grew by 6.9 percent 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.

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, the report 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, the report said. 

"We enjoy composite advantages, and all this means that we have the ability and the conditions to achieve higher quality, more efficient, fairer, and more sustainable development," Li said in his report.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.

"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 boost consumption in response to the new changes in consumer demand, focus on making structural adjustments in increasing investment, and create a positive cycle of supply structure upgrading and appropriate expansion of aggregate demand," Li's said in his report.

China will also promote consumption upgrading and develop new forms and models of consumption, extend preferential policies on purchase tax on new-energy vehicles by another three years, and rescind all local policies that restrict sales of non-local second-hand vehicles, Li said.

"We will support private actors in providing more services in healthcare, elderly care, education, culture and sports," the report said.

China will create integrated tourism demonstration zones, and lower ticket prices at key state tourist sites. The country will promote the healthy development of online shopping and express delivery services. All types of behaviour that infringe on consumers' rights and interests will be punished in accordance with law without leniency, he said. "We will enable investment to play the pivotal role in improving the supply structure," the report said.

About investments, 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 1 trillion yuan.

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

The country will carry out a new round of major technology transformation and upgrading projects, it said. The central government budget will earmark 537.6 billion yuan for investment in 2018, an increase of 30 billion yuan over last year.

"We will implement policies and measures designed to encourage private investment, introduce a number of attractive projects in sectors like railway, civil aviation, oil and natural gas, telecommunications, and make sure that private investment can gain entry and is able to develop," he said.   Li also said China will follow prudent monetary policy this year, with easing or tightening only as appropriate.

The government will make sure that the valve of aggregate money supply is well controlled and maintain a moderate growth in M2 monetary supply, credit and aggregate financing, the report said.

Efforts will also be made to ensure a reasonable and stable level of liquidity, and increase the proportion of direct finance, particularly equity finance, he said.