[Since the global financial crisis in 2008 and 2009, China has rapidly expanded debt to stimulate the economy and to make sure that it hit fairly ambitious targets for economic growth. Reformers have called for lower targets that would not require so much debt to achieve.]
By Keith Bradsher and Chris
Buckley
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Li Keqiang, China’s
premier, called on Sunday for economic growth this year of
“around 6.5 percent or
higher, if possible.” Credit Thomas Peter/Reuters
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BEIJING
— China set a slightly lower
economic growth target for this year as the country’s lawmakers began their
annual meeting on Sunday. The new target, while only a bit lower than last
year’s, continues a long streak of China trying to dampen expectations as the
country grapples with thorny problems like the maturing of its economy, its
considerable industrial overcapacity, a growing debt load and pernicious
pollution problems.
At the meeting of the National People’s
Congress, China addressed issues such as pollution, debt and foreign policy.
Projecting
Slower Growth
Li Keqiang, China’s premier, called on Sunday
for economic growth this year of “around 6.5 percent or higher, if possible,”
slightly more modest than last year’s target of 6.5 to 7 percent. Actual growth
last year, according to official data, was 6.7 percent.
Even with the slight drop in projected
growth, many economists argue that China’s annual target remains too ambitious
and is adding to its long-term problems. But Mr. Li defended the target.
“The projected target for this year’s growth
is realistic,” Mr. Li said in a report issued on Sunday before lawmakers
convened. “An important reason to stress the need for stable growth is to
ensure employment and improve people’s lives.”
In a separate report issued to the
legislature, the National Development and Reform Commission — which helps steer
the economy — said the growth target was meant to reassure the public at an
anxious time. Later this year, the Chinese Communist Party will undergo a leadership
shake-up, and officials have said that stability is essential.
“This rate of growth is conducive to
fostering healthy public expectations,” the commission report said. China, it
added, was “facing complex and volatile” conditions this year.
Since the global financial crisis in 2008 and
2009, China has rapidly expanded debt to stimulate the economy and to make sure
that it hit fairly ambitious targets for economic growth. Reformers have called
for lower targets that would not require so much debt to achieve.
Lingering
Pollution Problems
Mr. Li also tried to reassure a public that
has grown increasingly angry about noxious air, water and soil left by decades
of feverish industrial growth, and burning coal is a main culprit.
“We will work faster to address pollution
caused by coal burning,” Mr. Li said. Those steps would include trying to cut
the amount of coal used for winter furnaces and heaters. “All key sources of
industrial pollution will be placed under round-the-clock online monitoring,” he
said.
But China’s appetite for coal remains
enormous. Mr. Li said that China would keep cutting excess coal production this
year, but more slowly than previously. He said that this year the government
aimed to shut down at least 150 million metric tons of coal production. Last
year, he said, the government cut 290 million tons.
In terms of other pollutants, Mr. Li said
that sulfur dioxide and nitrogen oxide emissions would be cut 3 percent this
year and that fine particles of pollution in the air, which are of particular
threat to health, would decrease “markedly” in “key areas.” He also said that
energy consumption would decline by 3.4 percent per unit of economic output — a
calculation that will still allow increases in emissions of global warming
gases.
World
Stabilizing Force
Mr. Li did not mention President Trump, whose
campaign language suggested a tougher stance against China on trade and
regional issues. These annual reports by China’s prime minister are
traditionally used for laying out generalities, not specific policies. But Mr.
Li built on an effort by the president, Xi Jinping, to promote China as a
reassuringly stable and mature power in uncertain times.
“In the face of profound changes in the
international political and economic landscape, China will always be on the
side of peace and stability,” he said.
On trade, Mr. Li said China will continue to
oppose protectionism. “Economic globalization is in the fundamental interests
of all countries,” Mr. Li said. “China will not shift in its commitment to
promoting global economic cooperation.”
But Chinese officials were circumspect about
the government’s latest increase in military spending.
On Saturday, a spokeswoman for the National
People’s Congress, Fu Ying, told reporters that the rise would be about 7
percent. But the documents released at the opening of the legislative meeting
left people guessing about the exact size of China’s official defense budget
for 2017, unlike previous years.
Dealing
With Debt
Credit in China grew about 20 percent a year
between 2009 and 2015, and the level of corporate debt in particular has
alarmed economists who worry about a rising number of bad bank loans.
Mr. Li said that the government was looking
to lower debt loads in the economy from a splurge of bank lending, but he
suggested it would be done a “prudent” way that would not risk an economic
shock.
But the Ministry of Finance budget report,
issued alongside Mr. Li’s report, outlined a tougher approach to local
governments that have collected debt to pay for infrastructure. “Higher
priority will be given to preventing and controlling local government debt,”
the budget report said. Provincial governments would develop “local contingency
plans” to deal with debt risks, it said.
Making
Nice With Multinationals
Foreign companies have become increasingly vocal
about business barriers, international property theft and other problems in the
Chinese market. Some are turning elsewhere to establish a base for production.
Mr. Li held out an olive branch, promising to
“make big moves to improve the environment for foreign investors.” He said that
service industries, manufacturing and mining would become more open to these
investors.
He also promised that, contrary to most
expectations and previous experience, foreign companies would not be
discriminated against on license applications, setting standards or government
procurement. The country has laid out plans — called the Made in China 2025
initiative — for it to seize a global lead in a long list of key high-tech and
manufacturing industries in the next eight years.
Biggest
Applause Line
Legislators gave polite applause to most of
Mr. Li’s plans. But one new policy drew vigorous clapping in a country where a
national grid of bullet-train routes has quickly made long-distance travel
commonplace: Mr. Li said the government would end roaming charges on cellphones
used outside the province in which the phone numbers were initially registered.
Sui-Lee Wee contributed reporting, and Adam
Wu contributed research.
