China slashes GDP target to 6-6.5 pc amid slowdown, trade war

China aims to create more than 11 million new urban jobs this year and keep the urban unemployment rate within 4.5 percent, in line with its 2018 goals. At the same time, it will cut the social security fees paid by companies.

China to slash taxes, boost lending to prop up slowing economy — Chinese President Xi Jinping (REUTERS/Jason Lee)

China sought to shore up its slowing economy through billions of dollars in planned tax cuts and infrastructure spending, with economic growth at its weakest in almost 30 years due to weaker domestic demand and a trade war with the United States.

The government is targeting economic growth of 6.0 to 6.5 percent in 2019, Premier Li Keqiang said at Tuesday’s opening of the annual meeting of China’s parliament, less than the 6.6 percent gross domestic product growth reported last year.

Sources told Reuters earlier this year that China would cut its 2019 growth target to 6.0 to 6.5 percent from the 2018 target of around 6.5 percent as both global and domestic demand ebbed and the U.S. trade war heightened economic risks.

Speaking in Beijing’s Great Hall of the People, Li warned of the challenges the world’s second-largest economy faced and pledged to keep it on a safe footing with an array of stimulus measures.

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“The environment facing China’s development this year is more complicated and more severe,” he said. “There will be more risks and challenges that are either predictable or unpredictable and we must be fully prepared for a tough battle.”

Li said China’s fiscal policy would become “more forceful”, with planned cuts of nearly 2 trillion yuan ($298.31 billion) in taxes and fees for companies.