China will use infrastructure spending, private sector investment and business tax cuts to keep the economy growing around 6.5% or higher this year.
The government will look at the issue of high debt levels and industrial overcapacity.
The government will maintain a high level of infrastructure spending to off set the slowdown in housing construction, which should help keep demand for iron ore and coking coal used in producing steel.
China is largely sticking to the economic growth script and putting off any drastic and potentially de-stabilisng reforms, wanting a smooth run up to the 19th PARTY CONGRESS in November 2017, at which 5 of the country’s seven top leaders are set to be replaced.
Premier Li said the government’s focus would be on boosting consumption, shutting down idle steel mills and coal mines and cleaning up the environment “to make our skies blue again.”
Thus also allowing more room for private sector and foreign companies.
The government would lower taxes and administration fees for businesses and boost consumption of services by encouraging more private sector involvement in health car, education and aged care.
The uncertainty about American Economic Policy is a key challenge for China, especially the threat to impose sweeping tariffs on Chinese imports.
“World Economic growth remains sluggish and both the de-globalisation trend and protectionism are growing,” said Premier Li. Furthermore, he said that China would oppose protectionism and become more involved in global governance.
Overall, the article is explaining that as China has become a larger part of the global economy, it now faces the current issues of the global economy which include increasing protectionism and de-globalisation. Premier Li says China would oppose protectionism and become more involved in global governance. The sluggish world growth and uncertain American economic foreign policy, could impact on China’s economic growth and development. It is however, trying to address the huge issue of the environment.