China is aiming for average economic growth at or above 6.5 percent for the next five years, the government said on Saturday, as the world’s no. 2 economy seeks to balance deep structural reforms, gyrating financial markets and softening global trade.
Unveiling a draft of its new five-year development plan at the annual meeting of parliament, Beijing said it would target economic growth between 6.5-7 percent in 2016.
Weighed down by sluggish demand at home and abroad, industrial overcapacity and faltering investment, China’s economic growth slowed to 6.9 percent in 2015, its weakest in a quarter of a century. Economists expect it to cool further to around 6.5 percent this year.
China’s 13th five-year plan is a blueprint for economic and social development between 2016 and 2020.
In the week leading up to parliament, the government flagged major job losses in the key production industries of coal and steel as policymakers seek to eliminate inefficiencies and overcapacity in state-owned enterprises through consolidation and layoffs.
China aims to lay off 5-6 million state workers over the next two to three years, two sources said, Beijing’s boldest retrenchment program in almost two decades.
China’s leadership, eager to maintain stability and ensure redundancies do not lead to unrest, will spend nearly 150 billion yuan (USD 23 billion) to cover layoffs in just the coal and steel sectors in the next 2-3 years.
Premier Li Keqiang said the country will create 10 million new jobs and hold the urban registered unemployment rate below 4.5 percent in 2016.
The one-party state is targeting average consumer inflation around 3 percent and money supply expansion of around 13 percent in 2016, and aims to cap total annual energy consumption at 5 billion tonnes of standard coal by 2020 – the first time it has introduced such a target.
China will increase military spending by 7.6 percent this year, its lowest increase in six years, as the premier vowed to push on with a modernisation plan that will shrink staffing.
A big tent
Every year around 3,000 delegates from across the country meet in Beijing’s Great Hall of the People for the National People’s Congress (NPC) that lasts around 12 days.
The delegates attending the session represent China’s 31 provinces, municipalities and autonomous regions, as well as Hong Kong, Macau and the military. There are also delegates for self-ruled Taiwan, made up of defectors and their descendents. They serve five-year terms.
Parliament’s largely ceremonial advisory body, the Chinese People’s Political Consultative Conference, meets in parallel with the NPC. It is made up of business magnates, artists, monks, non-communists and other representatives of broader society, but it has no legislative power.
While the parliament is commonly considered a rubber-stamp body, applied to economic and political goals decided at the higher levels of the Chinese Communist Party’s leadership, debates can still be lively.
It is also a chance for officials from around the country to meet each other and exchange ideas: from sophisticated urbanites to the leaders of poor rural counties, along with celebrities, business executives, and regulators.