Billy is the editor of Verdict. You can reach him at billy.bambrough@verdict.co.uk

China’s growth for 2018 has been set at “around 6.5%”, down from last year — the first time in seven years the pace of growth had picked up.

The figure was announced at the opening session of the annual National People’s Congress — China’s rubber stamp-parliament — by premier Li Keqiang and is in line with the country’s existing expansion goals.

Actual growth in 2017 exceeded the official target, reaching 6.9%.

Meanwhile, the country cut its budget deficit target for the first time since 2012, down to 2.6% of gross domestic product from 3% in the past two years.

Li said that China’s economics and financial risks were “on the whole manageable”.

A report circulated to delegates and reporters said:



 However, Li also announced that China will increasingly clampdown on financially risky operations which have threatened some major companies in the country.

Last month Beijing took control of insurance and financial giant Anbang.

The decision to take control of the company for one year was taken with immediate effect to protect the interests of consumers and stakeholders of the private insurers, according to China’s state regulator.

The International Monetary Fund has reported the country’s debt has ballooned in recent years and is now equivalent to 234% of the total output.

In October last year Xi declared a “new era” in which achieving high-quality growth, reducing pollution, and controlling financial risk would take precedence over numerical growth targets.

It’s expected that the National People’s Congress will ratify the proposal to scrap the 10-year presidential term limit at its annual session that opened today.

This meeting is the first annual meeting of the National People’s Congress’ new five-year term.

Lawmakers are expected to begin incorporating president Xi Jinping’s thoughts into the constitution and remove the limit on him continuing in the top job beyond 2023.

The US is watching out for the new Chinese defence budget. Last year China raised its annual military spending to $151 billion – still only a fraction of US spending.

But with US president Donald Trump planning to arm the US military with a $686bn (€557bn) budget, Beijing could follow suit.</s>Image copyright Getty Images

China has set its 2018 economic growth target at "around 6.5%".

The figure, announced at the opening session of the annual National People's Congress, is in line with the country's existing expansion goals.

But it is below the 6.9% reported for 2017 - the first time in seven years the pace of growth picked up.

The report also said China would clamp down on the kind of financially risky operations which have threatened to cause the collapse of major firms.

It follows last months steps by Beijing to take control of insurance and financial giant Anbang.

Several other high-profile operations are also having their finances scrutinised by Beijing.

China is now the world's second largest economy, but a reliance on borrowing has led to pressing political concerns about debt risk.

As expected, the report delivered by Premier Li Keqiang said reining in this risk would be a key policy for the coming year, promising to "see that internal risk controls are tightened in financial institutions" and a "serious crackdown on activities that violate the law like illegal fundraising and financial fraud".

'High-quality development'

While many China watchers still believe the GDP numbers are much weaker than the official figures suggest, the country is a key driver of global growth.

It has relied heavily on debt-fuelled investment and exports to drive its growth of the past four decades. But Beijing is now focussing on slower but more sustainable consumption-based growth.

The report added that the unchanged growth target was "fitting given the fact that China's economy is transitioning from a phase of rapid growth to a stage of high-quality development" and would allow it to "achieve relatively full employment".

Other goals mentioned in the report included:

Achieving inflation of 3%

Cutting overproduction, including reducing steel capacity by 30 million tonnes and coal by 150 million in 2018

Reining in pollution

Reducing poverty

The report said that China's economics and financial risks were "on the whole manageable".

Its debt has risen significantly in recent years, with worrying numbers around corporate and household debt and non-performing bank loans.

Local government debt grew 7.5% percent last year to $2.6 trillion, according to figures in January.

And the International Monetary Fund (IMF) said recently that the country's debt had ballooned and was now equivalent to 234% of the total output.

It said Beijing needed to concentrate less on growth and instead help improve banks' finances, among other efforts.</s>A man stands on the Bund in front of Shanghai's financial district of Pudong in Shanghai, China February 26, 2018. REUTERS/Aly Song

BEIJING (Reuters) - China’s government is fully confident of achieving its 2018 growth target of around 6.5 percent, the head of the state council’s research office Huang Shouhong told a news briefing on Monday.

The growth target for this year, announced earlier on Monday in Premier Li Keqiang’s annual work report, was the same as one set for 2017. China’s economy grew 6.9 percent last year.</s>Image copyright Getty Images Image caption China has the world's largest army and has focused on modernising it in recent years

China has announced a military budget of 1.11 trillion yuan ($175bn; £126bn) for the coming year.

The figure, an 8% increase on last year, was announced as the annual meeting of parliament got under way in Beijing.

Prime Minister Li Keqiang also set a target of 6.5% growth for the economy.

The National People's Congress (NPC) is also expected to remove the two-term presidential limit, enabling Xi Jinping to remain in office indefinitely.

The move, which was long expected but has been controversial even in China, has helped cement Mr Xi's status as the most powerful leader since Chairman Mao Zedong.

Thousands of Chinese legislators at Monday's meeting burst into applause when the plan to scrap the two-term limit was read out to the chamber. The vote on the proposal will take place on 11 March and is expected to be unanimously approved.

The NPC is largely a rubberstamp parliament, endorsing decisions already made by the Communist Party.

Its delegates, about 3,000 of them representing all provinces and regions, are technically elected, but in practice, hand-picked by the Party.

Media playback is unsupported on your device Media caption Hu Jia is being forced to leave Beijing

The gathering takes place under tight security - known dissidents are routinely removed from the capital before it takes place.

Tackling the debt risk

The government has said it will focus on three main goals over the coming year: tackling China's exposure to financial risk, reining in rampant pollution and continuing to combat poverty.

In his opening report to parliament, Mr Li said the army must be "strong as stone" in the face of "profound changes in the national security environment".

The increased spending, announced in a budget report, is seen as a good indication of China's strategic ambitions, as it continues to modernise its army - the world's largest - and develop its infrastructure in contested areas like the South China Sea and its Himalayan border regions.

While expected, the spending increase will further unnerve China's regional rivals.

Image copyright Getty Images Image caption The NPC takes place with tight security and very little opportunity for opponents to challenge the leadership

China is now the world's second largest economy. After years of rapid growth, millions have been lifted out of poverty and there is a ballooning middle class.

There are also some 100 billionaires in China. Many of them are members of the Chinese People's Political Consultative Conference (CPPCC), the top advisory body, which is also meeting this week.

But a reliance on borrowing to fuel this growth has led to pressing political concerns about debt risk.

As expected, Mr Li's report said reining in this risk would be a key policy for the coming year, promising to "see that internal risk controls are tightened in financial institutions" and a "serious crackdown on activities that violate the law like illegal fundraising and financial fraud".

This could indicate further action like that taken against insurance giant Anbang, which was last month taken over by insurance regulators.

Mr Li set the growth target - the amount by which the economy is expected to continue expanding - at 6.5%, slightly lower than the 6.9% growth achieved in 2017.

On the horizon, as China lays out it financial ambitions, is a potential trade war brewing with the US, as the Trump administration pursues its policy of shifting the global balance in trade.

Media playback is unsupported on your device Media caption Should China's Xi be president for life?

China's trade surplus with the US reached an all-time high of $275.81bn in 2017.

President Donald Trump has already announced steep new tariffs on steel and aluminium imports to address what he calls "very stupid" trade deals, and has threatened further measures targeting Chinese imports specifically.

NPC spokesman Zhang Yesui said on Sunday that while China does not want a trade war "if the US takes actions that hurt Chinese interests, China will not sit idly by".

Mr Li also on Monday issued a fresh warning to Taiwan nationalists, saying Beijing "will never tolerate any separatist schemes or activities for 'Taiwan independence",

Beijing considers self-ruling Taiwan to be a breakaway province that will eventually be part of the country again, though many in Taiwan want a separate nation.</s>Beijing has set a lower economic growth target for this year than the 6.9 per cent achieved last year as it keeps an eye on global trade uncertainties and long-term financial risks and seeks new drivers for the world’s second largest economy.

The growth target of “around 6.5 per cent” revealed in Premier Li Keqiang’s annual government work report on Monday morning did not surprise markets at home or abroad. But it gives the government more flexibility than last year’s target of “6.5 per cent and higher if possible”.

Too little, too late? Foreign bankers fall out of love with China as Beijing fails to open up

Analysts said the change was reasonable given the tough tasks faced by the government in tackling financial risks, luring back private investment, revitalising state firms and encouraging technical innovation.

Zhang Jun, chief economist at Morgan Stanley Huaxin Securities in Shanghai, said a lower growth target was a reflection of a range of economic uncertainties, including expectations of higher interest rates in the United States, the setting up of potential trade barriers by the Trump administration and domestic financial deleveraging.

“This year’s growth target is no problem to accomplish,” he said. “If there are any signs of approaching the government’s floor, there’s plenty of room for policy loosening.”

Speaking on the sidelines of the annual meeting of the National People’s Congress, China’s legislature, which opened on Monday, Alfred Schipke, a China resident representative of the International Monetary Fund, said: “The growth target of about 6.5 per cent and addressing leverage … are the right emphasis. The report is broadly in line with our expectations.”

Li told the nearly 3,000 deputies at the meeting in the Great Hall of the People in Beijing that China faced “risks and challenges, some foreseeable and others not” in a pivotal period of transforming its growth model and shifting to new growth drivers.

For exports, which gave the economy a significant boost last year, “policy changes of the major economies and their spillover effects create uncertainty, protectionism is mounting, and geopolitical risks are on the ascent”, he warned.

China ‘doesn’t want a trade war’ with US, as sides agree to more talks in Beijing soon

Domestically, the State Council, China’s cabinet, has to address high levels of debt, severe industrial overcapacity and a squeeze on private investment, all the result of previous stimulus measures.

The government’s determination to shift away from investment-led growth was seen in the announcement of the first cut in the fiscal deficit ratio in three years and the continued commitment to clean up 16 trillion yuan (US$2.5 trillion) of confirmed local government debt and hidden liabilities in financial guarantee, financing vehicle and public-private partnership projects.

The Ministry of Finance has set a fiscal deficit target of 2.6 per cent of gross domestic product (GDP), down from about 3 per cent in the previous two years.

For the first time, the cabinet did not set a target for growth in M2 broad money supply this year, but the National Development and Reform Commission, China’s economic planner, had said previously it would be roughly same at last year’s target of 8 per cent. The actual growth last year came in at 8.2 per cent.

“The pace of financial regulation and deleveraging could be adjusted according to the situation,” Zhang said.

How has Xiconomics changed China? Beijing gives a review

At a media briefing on Monday afternoon, Huang Shouhong, the head of the State Council’s Research Office, said great efforts would be made to boost reforms if the economy stayed in a reasonable range.

“A slightly higher or lower growth than [target] can be accepted if employment, incomes and the environment have improved,” Huang said.

Tom Rafferty, chief China analyst at the Economist Intelligence Unit, attributed the softer tone on growth to the fact that guarding against financial risks remained high on the government agenda.

“The government’s bottom line for economic growth is likely to be 6.3 per cent”, he said, saying it was the minimum average Beijing needed to achieve its target of doubling 2010 GDP by 2020.</s>BEIJING-China has set its economic growth target at about 6.5% for this year, according to a work report delivered by Premier Li Keqiang at the opening session of the National People's Congress, the annual legislative meeting, on Monday.

China's economic growth accelerated for the first time in seven years last year, reaching 6.9% on rising global demand.

Beijing also plans to cap consumer-price inflation at 3% for 2018, the same as last year, according to the work report.

The government is planning to keep reasonable growth rates of M2--a measure of broad money supply--and total social financing in 2018, the report said.</s>BEIJING (dpa-AFX) - China maintained its growth target for 2018, despite the economy surpassing the goal last year, as the government aims to contain corporate debt and rein in pollution.



Premier Li Keqiang set the growth target at 'around 6.5 percent' for 2018. This was unchanged from the last year's target. 



Premier said in remarks ahead of the annual session of the National People' s Congress in Beijing on Monday.



The economy achieved a faster growth of 6.9 percent in 2017. Economists widely expect growth to slow this year as the government intends to bring stability in the financial system and curb corporate debt and combat pollution. 



The government set the budget deficit target of 2.6 percent of GDP for 2018 compared to 3 percent in 2017. Income thresholds for personal income tax are likely to increase, he said.



Consumer prices will rise 'around 3 percent' compared with 3 percent in the previous year. 



The economy is likely to create 11 million urban jobs in 2018 and the registered urban unemployment will remain within 4.5 percent, Li said. 



The defense spending is forecast to climb 8.1 percent, the fastest in three years. Spending is expected to total CNY 1.11 trillion. 



The government plans to reduce steel production capacity by around 30 million tons. 



Li said China will keep its prudent monetary policy neutral and will ensure reasonable liquidity. Without mentioning a target, Li said M2 broad money supply growth will remain reasonable.



In a communique, the National Development and Reform Commission said M2 will grow at a pace similar to the rate seen in 2017.



The National People' s Congress is also expected to remove the two-term limit for President, allowing Xi Jinping to remain in office.



Copyright RTT News/dpa-AFX</s>China has set its GDP growth target at around 6.5 percent for 2018, unchanged from that for 2017, according to a government work report released on Monday.

Given China's economic fundamentals and capacity for job creation, GDP growth of around 6.5 per cent will enable China to achieve relatively full employment, according to the report delivered by Premier Li Keqiang at the first session of the 13th National People's Congress, China's top legislature.

China aims to maintain inflation level at around 3 per cent and create over 11 million new urban jobs, reports Xinhua news agency.

The surveyed urban unemployment rate is projected to stay within 5.5 per cent, the registered urban jobless rate within 4.5 per cent, the report showed.

The above targets take into consideration the need to secure a decisive victory in building a moderately prosperous society in all respects, and are fitting given the fact that China's economy is transitioning from a phase of rapid growth to a stage of high-quality development, Li said.

The GDP growth target is the same as that of last year, but might deliver different growth as China makes it clear to prioritize growth quality over pace.

"We will strongly promote high-quality development," said Premier Li.

Chinese economy outperformed its annual growth target by expanding 6.9 per cent last year, picking up for the first time in seven years.

The same GDP target set for this year should also be within reach without much difficulty, according to global China watchers.

The International Monetary Fund in January raised its forecast for China's GDP growth from 6.5 to 6.6 per cent amid an upbeat outlook for the global recovery. International investment banks including UBS, J.P. Morgan and Nomura also revised their China 2018 GDP growth prediction upward to as high as 6.7 per cent.

"We enjoy composite advantages, and all this means that we have the ability and the conditions to achieve higher quality, more efficient, fairer, and more sustainable development," Li added.

The country will completely open up its general manufacturing sector to foreign investors this year. Meanwhile, access to sectors like telecommunications, medical services, education, elderly care and new energy vehicles will also be expanded for foreign investment, according to Li.

China's rising middle-income group, with a population of around 400 million, show increasingly bigger appetite for imported products.

To encourage imports, China will host the first China International Import Expo this year and lower import tariffs on products including automobiles and some everyday consumer goods, said Li. (IANS)</s>In a government work report released at the opening ceremony of China’s annual legislative session, known as the National People’s Congress (NPC), on Monday, the country’s defense budget for 2018 is projected to reach 1.11 trillion yuan ($175 billion), up 8.1 percent from the previous year. This growth rate in annual military expenditure is a slight jump from 7 percent in 2017 and 7.6 percent in 2016.

Despite the latest slight bump, the projected expansion of China’s defense budget continued to follow the general pattern of the nation’s economic growth, which has slowed considerably in recent years after enjoying nearly double digit growth for almost four decades, military experts suggested.

READ MORE: While 'US Tries to Curb China' in Asia-Pacific, Beijing Boosts Its Army

"China’s annual defense budget continues to follow a similar trend like the previous two years, when growth held steady around 7 percent. This is very different from the kind of double digit growth we saw from 10 years ago. The overall trend follows the new growth pattern started from 2016," Arthur Ding, director of the Institute of International Relations under the National Chengchi University in Taipei, told Sputnik.

The Taipei-based scholar pointed out that growth in China’s defense budget looks to be connected to the nation’s economic growth rate.

After averaging about double digit annual growth in the first 35 years after adopting economic reforms in 1978, China’s economic growth slowed considerately in recent years, dipping under 7 percent annual growth rate since 2015. In the same government work report where the annual defense budget was announced, Chinese authorities set the annual economic growth target to 6.5 percent in 2018.

"China is facing a rapidly aging population. Expenditure on social security coverage is expected to increase continuously, such as retirement pension and healthcare insurance expenses. Chinese Premier Li Keqiang also mentioned in his opening speech at the NPC to raise minimum income tax threshold [which could ease tax burdens for ordinary citizens]. I think Chinese leaders understand the changes taking place domestically. As a result, I believe China would try to lower the cost of military spending by integrating existing technologies," he said.

China’s proposed defense budget of $175 billion for 2018 makes it the world’s second largest annual military expenditure, trailing only the United States. But the US defense budget continues to be several times larger than China’s, military experts argued.

"In recent years, China’s defense budget growth stopped being double digit. In 2016, it was 7.6 percent. Last year, it was 7 percent. Now, it’s 8.1 percent. There’s a slight increase. We can reflect that [the changes came from] contingencies with North Korea and dealing with [US President Donald] Trump’s assertiveness. But it’s not an overreaction and it’s not alarming. We can make China bigger than it is to say ‘it’s the second largest defense budget’ in the world. But it’s a quarter of what the US defense budget. It’s an evolution. The more worrying one is the defense budget increase in the United States," Carlyle Thayer, emeritus professor at the Australian Defense Force Academy in Canberra, told Sputnik.

READ MORE: India-China Bonhomie is Back on Track — Indian Army Chief

Trump’s defense budget request for fiscal year 2019, released Monday, asked for $686.1 billion in military spending, up 12.1 percent from the previous fiscal year. If approved by the US congress, the latest US defense budget would become the first significant jump in US military spending in recent years, when the budget mostly stayed stagnant.

Ding, the Taiwan scholar, pointed out that China’s defense budget each year continued to take a relatively low share of its annual GDP.

According to figures from the Stockholm International Peace Research Institute (SIPRI), China’s annual military expenditure held a steady 2 percent share of the nation’s GDP for the past 30 years. In comparison, the United States spent as much as 5.7 percent of its annual GDP on military in the late 1980s before the end of the Cold War and continued to invest about 3.3 percent of its annual GDP on military in recent years.

The most recent warfare the Chinese military was involved in was the brief border war between China and Vietnam in 1979. During the military conflict, the Chinese military reportedly employed a tactic known as "the human sea attack" to swamp enemy strongholds with massive amount of soldiers, which led to heavy casualties of Chinese forces.

"Xi Jinping repeated that he wanted to create a modern army with Chinese characteristics by the 2020 framework. Building up large armies with AK-47s, like it did during the Korean War, is not on the card. I think China has moved away from that. When I was in Vietnam during the Vietnam War, the United States could fly a helicopter to bring ice-cream and beer to its troops. I suspect, over time, the land forces need to be better protected. You shouldn’t treat your troops as pawns. There’ll be increased cost to protect its forces and save lives for China," professor Thayer from the Australian Defense Force Academy said.

The Australian expert added that land forces could take a lesser role in the Chinese military as China does not face any obvious adversaries over its land borders, despite historical painful experiences of the Japanese invasion.

The views and opinions expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.</s>aims to expand its by around 6.5 percent this year, the same as in 2017, while pressing ahead with its campaign to reduce risks in the financial system, said on Monday.

The goal was kept unchanged even though the grew 6.9 percent last year and exceeded the government's target. Sources previously told that will maintain its growth target at "around 6.5 percent".

Economists had already expected the world's second-largest to lose some momentum this year as the government deepens its push to contain a build-up in corporate debt, while a war on pollution and a cooling property market weigh on manufacturers and

In his annual work report, Li also said has cut its budget deficit target for the first time since 2012, suggesting will be more watchful of fiscal spending while not tapping the brakes so hard that it precipitates a sharp slowdown.

"Policy wise, the report definitely has a tightening bias" said Betty Wang, senior at in Hong Kong. "In line with expectations, the government is pushing through their reform agenda."

But last week's escalation in trade tensions with the has jumped to the top of the list of uncertainties facing this year.

said he would impose hefty tariffs on and aluminium to protect U. S. producers, risking retaliation from major trade partners like China, and and sparking fears of a global trade war.

Li said opposes protectionism and supports the settlement of trade disputes through negotiation, but will "resolutely safeguard" its legitimate rights and interest.

Yet, will keep its currency, the yuan, basically stable, Li said in remarks to the opening of the annual meeting of parliament.

He said a steady rise in import and export volumes can be expected this year, a view unchanged from a year ago.

No export target was given for the third straight year.

"We can expect continued recovery of the global economy, but there are also many factors that bring instability and uncertainty," he said.

"The policy changes of the major economies and their spillover effects create uncertainty; protectionism is mounting, and geopolitical risks are on the ascent," Li said.

China's and financial risks "are generally under control" but more needs to be done to resolve issues such as local government debt, Li said. He also said will improve supervision over shadow banking, and financial holding companies, and step up risk controls at financial institutions.

Li said has cut its budget deficit target to 2.6 percent of (GDP) this year from 3 percent in 2017. Most analysts had expected the target would be maintained or come in slightly lower.

However, since the has been expanding at such a strong pace, analysts said the cut is more symbolic of Beijing's intention to further control debt growth.

"The actual figure is even lower than we expected...a 2.6 percent deficit would be about 2.3 trillion yuan ($363.5 billion) in absolute terms, which equals to the 2016 level," said Wang.

"It shows the government's determination to control leverage in the "

Heavy government infrastructure spending was a behind China's forecast-beating growth last year, but has been cracking down recently on some projects launched by local governments as it seeks to curb their spending and debt.

Despite the lower deficit ratio, the absolute amount of the deficit is expected to remain unchanged at 2.38 trillion yuan ($376 billion), according to the finance ministry's annual budget report released on Monday.

Li also reiterated that will keep its prudent monetary policy neutral, neither too loose nor too tight, and will maintain reasonably steady liquidity, he said.

While the central has been gingerly raising money market rates as part of its crackdown on riskier lending practices, it has also kept markets generally well supplied with funds whenever there are worries of a deeper cash squeeze, and lending hit a fresh record last year.

Li also said he expects reasonable growth in broad M2 money supply and total social financing this year, without stating a target.

The National Development and Reform Commission, the state planner, said in a separate report that outstanding total social financing (TSF) and M2 growth will grow at a similar pace this year as in 2017.

TSF grew 12 percent last year, in line with the target, but M2 growth slowed to 8.2 percent, below the goal of around 12 percent. had expected both targets to be set at 10 percent or lower this year.

"If I remember it right, it's the first time that they don't have a specific target in two decades. It shows authorities now prefer a tighter stance on monetary policy," Wang said.

"Overall policy wise both monetary and fiscal policy will be tighter than last year, because the government wants to control financial leverage and overall debt levels for the broader "

also set its consumer price index at "around 3 percent" compared with 3 percent last year, as widely expected.

Stability will be the watchword this year as pursues his vision of turning into a "modestly prosperous" nation by 2020 and into a "strong power" on the world stage by 2050.

Defence spending saw its biggest increase in three years.

will also continue to cut more and coal production, deepening its vow to make "skies blue again", as chases quality over dizzying, polluting growth.
China's "two sessions" - the annual meetings of the national legislature and the top political advisory body - opens in Beijing; major announcements include an 8% rise in its military budget and a GDP growth target of around 6.5%.