China needs to work hard to achieve the 6.5 per cent GDP target set for 2018

Beijing: China needs to work hard to achieve the 6.5 per cent GDP target set for this year, a Chinese official today said, even as Beijing announced plans to include more industries for capacity reduction along with steel and coal to cut costs.

The target of 6.5 per cent, which was the same as last year was fixed yesterday by Chinese Premier Li Keqiang in his annual work report submitted to the parliament the National Peoples Congress (NPC). The growth target set in this year’s government work report is attainable through “hard work”, He Lifeng, head of Chinas planning body the National Development and Reform Commission (NDRC), said.

Chinas economy expanded 6.9 per cent year-on-year in 2017 above the government’s target of around 6.5 per cent. With further development in emerging industries and modern services, consumption is likely to contribute around 60 per cent to economic growth in 2018, He told media on the sidelines of NPC. In 2017, consumption contributed 58.8 per cent to growth, nearly four percentage points higher than five years ago.

The investment will contribute one third to this year’s growth as China will also push forward investment, especially on the real economy, he said. For foreign trade, He said it will grow steadily and support 8 to 9 per cent of economic growth as long as the world economy keeps a stable growth.

He also expected further progress in the supply-side structural reform on basis of sound achievements in tasks like capacity reduction. Industries, including plate glass, cement and electrolytic aluminium, will be the target of the country’s next stage of capacity cuts along with steel and coal.

China has slashed over 50 million tonnes of ineffective steel capacity and 250 million tonnes of coal last year, both outperforming annual targets. Another 30 million tonnes of steel capacity and 150 million tonnes of coal capacity will be cut in 2018, as per the plan announced by the government

Ning Jizhe, deputy head of the National Development and Reform Commission, said China will take a series of new measures this year including the expanding the negative list to solicit more foreign investment.

China will greatly relax market access, promote investment facilitation and encourage foreign capital entry in more regions, he told the media. The negative list approach to market entry, which states sectors and businesses that are off limits to foreign investment, will be expanded nationwide. China will fully open up its general manufacturing and substantially improve the opening level of the service sector, Ning said.

Referring to complaints of unfair treatment of foreign investors, he said China will ensure fair competition between domestic and foreign enterprises in an all-around way. He also pledged strict protection of intellectual property rights.

More favourable policies concerning capital transfer and land use, which are enjoyed by domestic investors, will be given to foreign firms when they invest in China’s middle, western and north-eastern regions, Ning said. China received 8515.83₹ billion last year, according to government report submitted to the NPC yesterday.