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China sets new economic growth target

5 March, 2016
China sets new economic growth target

China’s National People’s Congress has set the country’s growth target for 2016 in a range of 6.5%-7%.


Premier Li Keqiang will announce the target in his address to delegates, according to the text of his speech.


The annual congress in Beijing sets out to determine both the economic and political agenda for the country.


It comes at a time when China struggles with slowing economic growth and a shift away from overreliance on manufacturing and heavy industry.


The party congress is also expected to approve a new five-year plan, a legacy of the communist command economy.


Why China’s party congress matters

Economic woes


“In setting a projected growth rate of between 6.5% and 7% we have taken into consideration the need to finish building a moderately prosperous society in all respects and the need to advance structural reform,” Mr Li’s text says.


Last year, China’s goal was “about 7%”. The economy actually grew by 6.9% – the lowest expansion in 25 years.


Mr Li will also say that China targets consumer inflation at “around 3%” and unemployment “within 4.5%”.


Meanwhile, the country’s defence spending will be raised by 7.6%, the state-run Xinhua news agency reports, citing a budget report.


This year’s congress is overshadowed by the current economic strains as China experiences slowing economic growth and extreme volatility in stock markets.


The stock market slump had seen indexes lose more than 30% of their value in 2015 and led to large-scale government intervention of limited success.


Beijing has also been accused of guiding the yuan currency lower to boost the competitiveness of Chinese exports on the global market.


A slew of weak economic data has recently added to the concerns and US ratings agency Moody’s has downgraded its outlook for China from “stable” to “negative”.

Social tensions


There also is concern over rising unemployment as Beijing seeks to gradually shift its economy from overdependence on manufacturing and industry towards more services and consumer spending.


A government official said earlier this week that 1.8 million workers were expected to be laid off in the steel and coal industries.


With Beijing keen to prevent social unrest, the government has tightened its grip on dissenters and government critics.


In their latest move, authorities have blocked the account of a prominent critic and cracked down on Hong Kong booksellers publishing books critical of China’s leaders.


President Xi Jinping recently went on a well-publicised tour of the main Communist Party newspaper, the state news agency, and state television, demanding absolute loyalty to the party and its leadership in thought, politics and action.


What is the National People’s Congress?


Under China’s 1982 constitution, the most powerful organ of state is meant to be the National People’s Congress, China’s parliament. Critics argue though that it is little more than a rubber stamp for party decisions.


The congress is made up of nearly 3,000 delegates elected by China’s provinces, autonomous regions, municipalities and the armed forces. Delegates hold office for five years, and the full congress is convened for one session each year.


This sporadic and unwieldy nature means that real influence lies within a standing committee of about 150 members elected from congress delegates. It meets every couple of months.


In theory, the congress has the powers to change the constitution and make laws. But it is not seen as an independent body in the Western sense of a parliament.