China has lowered its growth target for 2019 as the Chinese premier, Li Keqiang, warned of “tough” challenges facing the world’s second-largest economy.
He set the country’s growth at 6.0 to 6.5%, down from a target of 6.5% last year. The bottom of the target band would represent the country’s slowest growth target in nearly three decades.
Li said that “in pursuing development this year, we will face a graver and more complicated environment as well as risks and challenges”, in a report to be given to the opening of the National People’s Congress, China’s legislative body, on Tuesday.
“We must be fully prepared for a tough struggle,” he said, according to prepared remarks. Li also changed China’s new GDP target to a band rather than a specific figure.
In 2017, China’s economy expanded at its slowest pace in more than 30 years – 6.6% – as a government campaign to root out risky financial debt hit spending by local governments and companies. A protracted trade war with the US has also hit consumer and business confidence.
China’s largest political event, a meeting of legislative delegates and political advisers nicknamed the “two sessions” or lianghui, gets under way this week. The largely ceremonial event takes place as the Chinese president, Xi Jinping, faces the most difficult test of his term. The Communist party has long described social stability as predicated on economic development.
The Chinese leadership is expected to offer assurances in the form of support for the economy and citizens. In a report on local and central budgets for 2019, officials pledged to focus on preventing local government debt risk, increasing consumer spending and reforming its dominant state sector of state-owned enterprises.
So far officials have focused on politics, with Xi calling for strict adherence to ideological work. In Li’s work report on Tuesday, he outlined following “the guidance of Xi Jinping Thought” as the first core principle.
This year is a year of sensitive anniversaries, including the 70th anniversary or the founding of the People’s Republic of China as well as the 30th anniversary of the crackdown on Tiananmen Square protests in 1989.