China is the world's second largest economy

Beijing: China today set its GDP growth rate for 2018 at around 6.5 per cent, same as last year, as the world's second largest economy aims to reduce risks to its financial system from a rapid build-up in debt.The GDP target was announced by Premier Li Keqiang in his annual work report as the country started its parliament session.The session is being regarded significant at it is set to endorse key constitutional proposals to remove two term limits for the president and vice president.After the ceremonial opening attended by President Xi Jinping and around 3,000 delegates, Premier Li outlined the government's achievements last year and targets set for this year.Given China's economic fundamentals and capacity for job creation, the GDP growth of around 6.5 per cent will enable China to achieve relatively full employment, Li said in his report.The report also said China would clamp down on the kind of financially risky operations which have threatened to cause the collapse of major companies.It follows last month's steps by the government to take control of insurance and financial giant Anbang.China is now the world's second largest economy, but a reliance on borrowing has led to pressing political concerns about debt risk.The report said reining in this risk would be a key policy for the coming year, promising to "see that internal risk controls are tightened in financial institutions" and a "serious crackdown on activities that violate the law like illegal fund raising and financial fraud".Chinese economy which is slowing down every year grew by 6.9 per cent last year. China aims to maintain inflation level at around three per cent and create over 11 million new urban jobs. The surveyed urban unemployment rate is projected to stay within 5.5 per cent, the registered urban jobless rate within 4.5 per cent, the report showed.The above targets take into consideration the need to secure a decisive victory in building a moderately prosperous society in all respects, and are fitting given the fact that China's economy is transitioning from a phase of rapid growth to a stage of high-quality development, the report said.Li said China will actively expand imports this year as it aims to further open up its market.To encourage imports, China will lower import tariffs on products including automobiles and some everyday consumer goods, Li said."We will open our market wider to promote industry upgrading and more balanced development of trade, and to provide Chinese consumers with a broader range of choices," he said.China will also strengthen the fundamental role of consumption in driving economic growth while promoting effective investment in 2018, he said.About investments, Li said this year China will see 732 billion yuan (about USD 115.6 billion) invested in railway construction and around 1.8 trillion yuan invested in highway and waterway projects; the scale of investment in ongoing water conservancy projects will reach 1 trillion yuan.The central and western regions will continue to be the priority for major infrastructure construction, he said.The country will carry out a new round of major technology transformation and upgrading projects, it said.The central government budget will earmark 537.6 billion yuan for investment in 2018, an increase of 30 billion yuan over last year."We will implement policies and measures designed to encourage private investment, introduce a number of attractive projects in sectors like railway, civil aviation, oil and natural gas, telecommunications, and make sure that private investment can gain entry and is able to develop," he said.Li also said China will follow prudent monetary policy this year, with easing or tightening only as appropriate.The government will make sure that the valve of aggregate money supply is well controlled and maintain a moderate growth in M2 monetary supply, credit and aggregate financing, the report said.Efforts will also be made to ensure a reasonable and stable level of liquidity, and increase the proportion of direct finance, particularly equity finance, he said.

© Thomson Reuters 2018