China lowers growth target amid trade and debt fears

China lowers growth target amid trade and debt fears

Premier Li Keqiang told the opening session of China's annual National People's Congress (NPC) that the government is targeting growth of 6 per cent to 6.5 per cent this year, lowering its range from last year.

Beijing is determined to achieve above six percent growth for the next two years to "meet its promise" of doubling GDP for the decade ending 2020, said Lu Ting, an analyst at Nomura bank.

Meanwhile, US-China trade talks are ongoing and Beijing's work report published on Tuesday stresses the government's commitment to promoting the negotiations and safeguarding economic globalisation and free trade. "It is not a threat to other countries", he said.

He also said the China-US trade talks have made substantive progress on many issues of common concern, and both countries and the global community have responded in a positive manner. China's imports also fell at the start of the year.

China isn't the only economy that has reported slower growth. China's total military outlay, the second-largest behind the United States, is estimated by independent experts to exceed $220 billion a year when off-budget expenses are added in.

Over the past year, China's central bank has cut the reserve requirements for commercial lenders five times to spur loans to small and private companies - vital for growth and jobs.

"China has long maintained its military is for the defense of its borders but that definition has broadened over the years", Roggeveen said.

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The 2019 defense budget will be 1.19 trillion yuan (about 177.61 billion USA dollars), figures from the report show.

China will increase its defence spending by 7.5 per cent this year to 1.19 trillion yuan (S$240 billion), a slightly slower increase compared to last year's 8.1 per cent.

No agreements have been announced on the core of the dispute: USA pressure on Beijing to roll back its plans for state-led creation of global competitors in robotics and other technology. Some American officials worry they might erode USA industrial leadership.

Zhang Liqun, research fellow at the Macroeconomic Department of the Development Research Center of the State Council, said last week that due partly to trade tensions, many export-related companies in Guangdong let their employees go on vacation in November with no clear plans for further production.

In a push to ramp up infrastructure investment, China's finance ministry raised the special bond issuance quota for local governments to 2.15 trillion yuan ($320.8 billion) from 1.35 trillion yuan a year ago.

Beijing faces a WTO challenge filed in July by the European Union against technology licensing rules the 28-nation trade bloc said improperly hamper the ability of foreign companies to protect and profit from their technology. The original plan included subsidies and the United States wants to see those scrapped, something China has promised along with "competitive neutrality".

This does not necessarily constitute a new promise but is a repetition of previous pledges to further open the economy to foreign investment.

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