China on Sunday reduced its growth forecast to around 6.5% for 2017, down from the target range of 6.5-7% it had put itself up for a year before, a government report released at the inaugural session of country’s Parliament said.
The closely-watched growth target for the world’s second largest economy was a 25-year low since the previous low of 6% in 1992.
Pushed down by falling demand for its goods globally and overcapacity in its manufacturing and steel sectors, China’s growth rate has fallen sharply in recent years, raising fears of crippling slowdown.
“[China will] pursue better results in actual economic work,” Premier Li Keqiang said quoting from the reporting at the inaugural meeting of the annual session of China’s top legislature, the National People’s Congress (NPC).
“Stability is of overriding importance,” Li said.
The report said the projected target was in line with both economic principles and realities, adding it will help stabilise market expectations and facilitate the country’s structural adjustments.
“It will also contribute to achieving the goal of finishing the building of a moderately prosperous society in all respects. An important reason for stressing the need to maintain steady growth is to ensure employment and improve people’s lives,” the report said.
“Li called for uniting more closely around the CPC Central Committee with Xi as the core and working hard to fulfil development targets,” official news agency, Xinhua reported.
“2017 is of crucial importance for the country as the CPC will convene its 19th National Congress in the second half of the year to elect a new leadership for the next five years during which President Xi Jinping’s vision of a well-off society will be achieved,” it added.
The reported added that China aims to create more than 11 million jobs this year, with registered urban unemployment rate kept within 4.5%.
“China added 13.14 million jobs in 2016, and the registered urban jobless rate stood at 4.02% at the end of last year,” the report said.
One of the focus areas, the report said will be to cut overcapacity in “bloated sectors”.
“China will push its drive to cut overcapacity in bloated sectors, with targets to slash steel production capacity by around 50 million tonnes and coal by at least 150 million tonnes this year,” it said.
Tackling overcapacity, a key part of China’s supply-side structural reform, has been high on the government agenda since the end of 2015.
“Last year, China eliminated steel production capacity by more than 65 million tonnes and coal by over 290 million tonnes, both beating government annual targets,” it said.