The growth target for the Chinese economy will be 6.5 percent, the same as last year, even though the Chinese economy actually exceeded the target in 2017 and grew by 6.9 percent.
The consumer price index is also still set at 3 percent, same as last year.
The budget deficit target has been trimmed, last year it was 3 percent, this year it’s 2.6 percent of the gross domestic product.
For broad M2 money supply and total social financing (TSF), the target was 12 percent last year, this year no target has been given, Li only said that he expects reasonable growth.
The fact that the growth target is kept is reinforcing views that avoiding financial risks and quality-growth still have a high priority for Beijing. According to President Xi Jinping’s plans, China shall be a “modestly prosperous” nation by 2020 and a “strong power” on the world stage by 2050. Stability is an important factor for this.
The trimmed budget deficit target this year shows that the Chinese government is determined to control leverage in the economy. In the past, heavy government spending often drove economic growth, but Beijing increasingly tries to curb the spending and for example started to crack down on some projects from local governments.
The hefty tariffs on imported steel and aluminum announced by Trump spark fears of a global trade war. Regarding this, Li stated: „China opposes protectionism and supports the settlement of trade disputes through negotiation, but will “resolutely safeguard” its legitimate rights and interest.”
