China sets lowest growth target in more than 20 years

China sets lowest growth target in more than 20 years

China has cut its growth target for this year as the world's second-largest economy pushes through painful reforms to address a rapid build-up in debt, and constructs a "firewall" against financial risks. China targeted growth of 6.5 to 7 percent last year and ultimately achieved 6.7 percent, the slowest pace in 26 years.

"In the past year, China's development has faced grave challenges posed by a great many problems and interwoven risks and dangers both at home and overseas", Li said in his address to the National People's Congress (NPC), the Communist Party-controlled legislature.

Tensions in the South China Sea have been particularly acute in the past three years, as China has built seven artificial islands the US and its allies fear could be used to enforce Beijing's extensive maritime claims in the area.

Despite the decline, that growth would keep China's economy as one of the world's strongest - the second-largest behind the U.S.

This year's "lianghui" comes ahead of a major Chinese Communist Party congress, due to be held later this year.

In that speech, Beijing signalled it would be going for growth and in doing so triggered an unexpected rally in commodity prices that 12 months later delivered Australia its biggest boost to national income in 6 ½ years.

With the administration of new US President Donald Trump proposing a 10 percent jump in military spending in 2017, and worries about potential disputes with the United States over the South China Sea and the status of Taiwan, some in China had been pressing for a forceful message from this year's defence budget.

He said the government would this year organise trips for young people "to visit the mainland on study trips and experience it for themselves", adding that the trips would "strengthen the love of both region and country among the people of Hong Kong and Macau".

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"China's most important success since the 18th CPC National Congress rests on the success in strategic policymaking, which constitutes the essential reason for China's success", Hu said.

The target is below expectations and indicates authorities will prioritise risk-control over short-term growth.

China will continue to cut its coal and steel production capacities, but at roughly 50 million tons for steel and 150 million tons or more for coal, this year's targeted cuts are lower than the 65 million tons and 290 million tons, respectively, for the previous year. But the target is closely watched as a forecast of economic performance, which has repercussions throughout Asia, where China is the biggest trading partner for all its neighbours. That is down from 13.14 million jobs created in 2016 and a jobless rate of 4.02% at the end of 2016. But reform advocates complain state companies still control industries from banking to telecoms to energy and benefit from monopolies, low-priced bank loans and other favors.

Hu also noted that China has been taking part in the global governance system and promoting worldwide relations featuring cooperation and win-win results.

China's defence budget is set to rise by 7 per cent this year 2017.

Chinese authorities have struggled in recent years to reshift priorities away from the traditional bastions of the economy - manufacturing, exports and government spending - to focus on domestic consumption and services. He also rejected activities related to "Taiwan independence".

Beijing's military spending has grown by double digits nearly every for most of the past two decades.

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