02:29 GMT18 May 2021
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    MOSCOW (Sputnik) - China has set a lower target for its economic growth in 2019, projecting its GDP to expand by 6-6.5 percent, after the country’s 6.6 percent annual GDP growth in 2018 was the slowest pace in 28 years, Chinese Premier Li Keqiang said when delivering the 2019 government work report during the National People’s Congress in Beijing.

    "Based on comprehensive analysis of both domestic and global conditions, this year our nation’s development will face a more complicated and harsher environment. There will be more predictable and unpredictable risks and challenges. We need to be prepared to fight a tough battle …. The primary targets for this year’s economic and social development are: the GDP is expected to expand by 6-6.5 percent," Li said in the report Monday.

    Nevertheless, Li stressed that China has the firm will and capability to overcome all kinds of difficulties and the nation’s long-term economic outlook is still positive.

    READ MORE: China Touts 'Stable' Economic Growth & Structural Reforms in 2019

    Despite showing signs of economic recovery in early 2018, escalating trade dispute with the United States has seriously hindered the momentum of China’s economic growth. According to official figures, China’s GDP grew 6.8 percent and 6.7 percent in the first two quarters of 2018, respectively, and the number stood at 6.5 and 6.4 percent in the third and the fourth quarter of the year, respectively.

    Chinese economists illustrated the impact of the trade tensions on China’s economic growth.

    "Our [China’s] trade surplus takes a very small share of our annual GDP today. But trade with the United States still has a significant impact on the Chinese economy, because of its influence on the capital market and the investors’ confidence," Zhang Jun, the director of the China Center for Economic Studies at Fudan University in Shanghai, told Sputnik.

    After Chinese President Xi Jinping and US President Donald Trump agreed to seek solutions to bilateral trade tensions at the meeting during the G20 summit in Argentina last year, top trade negotiators from both countries went through several rounds of trade talks in recent weeks, which led to the Trump administration’s decisions to suspend the planned increase of tariffs on Chinese goods by March 1.

    READ MORE: China's Economic Stimulus Plans Encourage Investors, But Debt Concerns Linger

    As both sides are close to reaching a new trade deal in the near future when Xi and Trump meet again, the Bloomberg reported that the United States could remove all the tariffs imposed on Chinese goods last year, which could bring timely relief to China’s economic growth.

    Tax Cut

    As part of Chinese government’s efforts to help companies in the manufacturing industry to cope with the projected economic slowdown, China plans to reduce the taxation rate in the manufacturing industry from 16 percent to 13 percent in 2019, Li said in the report.

    "This time’s tax reduction focuses on ‘releasing more water to cultivate the fish.’ It’s an important measure to ease the burdens of enterprises and stimulate energy in the market. It’s a key macroeconomic decision to support stable economic growth and protect employment," he said.

    In addition, Li added that China also plans to allocate 100 billion yuan (about $15 billion) to offer vocational training for over 15 million workers in 2019.

    READ MORE: China's Top Economic Planner Details Stimulus to Boost GDP

    Air Quality

    Despite China’s focus on stabilizing the nation’s economic growth in 2019, the nation will continue its efforts in fighting pollution, especially on improving the air quality, Li stressed.

    "We will continue to push forward pollution prevention and control while trying to safeguard the results of our battle to protect the blue sky. This year, the emission of sulfur dioxide and nitrogen oxides need to drop by three percent, while the concentration of PM 2.5 in key regions continuing to fall," he said.

    Chinese companies will be required to take on more responsibilities on protecting the environment by reducing their emissions and related environmental impact on water and soil, Li added.

    READ MORE: Bolton Says Sino Economic Changes Could Impact China's Political System

    Slower Defence Expansion

    In the Chinese government’s annual draft budget report submitted to the NPC, China plans to lower its defence budget growth to 7.5 percent in 2019, from the 8.1 percent in 2018, the official Xinhua News Agency reported on Tuesday.

    According to the draft budget report, China’s defence budget for 2019 is projected to be 1.19 trillion yuan.

    During a press conference on Monday, Zhang Yesui, spokesperson for the NPC, stressed China’s defence budget growth only serves the purpose of safeguarding the country’s national security and meeting demands from military reforms with Chinese characteristics.

    "China’s limited defence budget is absolutely for protecting the nation’s sovereignty, security and territorial integrity. It will not be a threat to other nations," Zhang reiterated.

    2019 will mark the fourth straight year of single-digit defence budget growth for China, following five consecutive years of double-digit expansion.

    The views and opinions expressed by the speaker do not necessarily reflect those of Sputnik.

    The views and opinions expressed in the article do not necessarily reflect those of Sputnik.

    investing, economy, GDP, economic growth, China
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