China lowers growth target to 6.5% and pledges to tackle “zombie enterprises”

Chinese government spokeswoman Fu Ying told a news conference in Beijing that China would raise its 2017 defense budget by about 7 percent, which could mark the third consecutive year in which spending growth rates have declined, depending on the final figure. Amid the antagonistic mood between the United States and China, Japanese Prime Minister Shinzo Abe, who has increased the country’s defense budget for five years in a row since taking office at the end of 2012, told the Defense Budget of the House of Councillors on March 2 that he is not planning to keep the defense budget below 1% of GDP. “So with this economy, 6.5 (percent) is mind-boggling”. The central bank also lowered its growth targets for the so-called M2 money supply and for loans, both of which were trimmed to 12% from 13% in 2016.

The government’s budget deficit target was kept unchanged at 3pc of the Gross Domestic Product.

The government is placing a high priority on maintaining social order, as the country is awaiting a change in its political leadership, a once-in-five-year event that takes place at the National Congress of the Communist Party of China.

“But this development also reflects Beijing’s ambition to impose its supremacy over Asia by giving itself the means of being a credible power”, he said.

“It seems unlikely, since stability comes first in the short term”, Jia said.

Li said the party would continue to fight smog and pollution. Monetary policy is going to come under pressure because the US Federal Reserve is expected to further raise interest rates, probably as soon as this month, with more rises to follow.

China should also press on with its efforts to rehabilitate rundown areas in towns and cities.

China “may be adversely affected” if Trump goes ahead with “tough policies”, but the impact should be limited, said economist Song Lifang at Renmin University in Beijing.

Last year, USA warships conducted several freedom of navigation operations to counter what Washington sees as Beijing’s efforts to limit access in the waters and also to challenge its “excessive maritime claims” in the South China Sea.

China will continue to reform its fiscal and financial systems, accelerate reform of State-owned enterprises, and strengthen protection of property rights, the premier said.

According to the Government Work Report, China will cut 50 million tons of steel production capacity, reduce 150 million tons of coal production capacity, and eliminate or postpone the building of 50 million kilowatts of coal-fired power generation capacity this year.

China’s real military spending will nearly double between 2010 and 2020, reaching $233 billion a year by the end of the decade, according to a report in December by IHS Jane’s, a provider of defense information and analysis.

NBC News reported last month that the us response to China’s moves in the South China Sea were becoming more aggressive as it deploys additional military hardware in the area.

“We owe all the achievements made over the a year ago to the sound leadership of the Party Central Committee with Comrade Xi Jinping as its core”, Li said.