Amid slowdown and trade war with US, China cuts GDP growth target to 6-6.5%

China is all set to pass a new foreign investment law, providing an equal footing to investors abroad with that of local business to meet Trump’s demands.

China cut its official GDP target to 6 to 6.5 per cent this year, reports media. The world's second largest economy is grappling with the ongoing trade war with the US and a continued economic slowdown.

As per reports, Chinese premier Li Keqiang had proposed the lowered growth rate in his work report for 2019 at the opening session of the annual session of the National People's Congress (NPC). The NPC has over 2,900 deputies and the advisory body – the Chinese People's Political Consultative (CPPCC) – is holding its annual sessions in Beijing. The sessions would go on for the next 10 days, media reports.

China has been struggling with continued economic slowdown and the trade war with the US has not helped its economy. In 2018, the Chinese economy, which is largely dependent on exports, slowed down to 6.6 per cent, the lowest in about three decades.

China is all set to pass a new foreign investment law to boost the economy. This law would provide an equal status to investors abroad and treat them at par with local business with legal safeguards for IPR and technology transfer. The draft law is aimed to meet the main demands of US President Donald Trump to end the trade war, media reports.

The draft foreign investment law will be submitted to the NPC, which began in Beijing on Tuesday, for review on March 8 and put to vote on March 15, media reports quoted NPC spokesman Zhang Yesui as saying on Monday.

The new investment law providig a level-playing field to investors abroad with local investors is being passed by China in record time to work a deal with Trump and put an end to the trade war that is impacting China’s economy badly.

Trump had declared the trade war last year demanding China to reduce the $375-billion trade deficit, provide legal protection for intellectual property rights (IPR), technology transfer and more access for American goods to Chinese markets.

Tariffs on over $250 billion Chinese exports to the US were also increased and Trump threatened to extend tariffs on $200 billion Chinese imports to 25 per cent.

However, he extended the March 1 deadline to impose further tariffs on the rest of the Chinese goods, as both the countries are engaged in intense talks to end the deadlock.

In his opening note, Chinese premier Li mentioned that China aims to maintain consumer inflation level at around 3 per cent and create over 11 million new urban jobs. China expects the surveyed urban unemployment rate to stay around 5.5 per cent, and the registered urban unemployment rate within 4.5 per cent.

"The above projected targets are ambitious but realistic – they represent our aim of promoting high-quality development, are in keeping with the current realities of China's development, and are aligned with the goal of completing the building of a moderately prosperous society in all respects," the Li’s report noted.

As 2019 is the 70th anniversary of the founding of the People's Republic of China, it is a crucial year for it. China is also endeavouring to achieve the first centenary goal of building a moderately prosperous society in all respects.

Source: Media reports

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