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China keeps growth target of about 6.5 percent this year

Key Points
  • The goal was kept unchanged even though the economy grew 6.9 percent last year, exceeding the government's target.
  • Premier Li Keqiang said he expects reasonable growth in broad M2 money supply and total social financing this year, without stating a target.
Chinese President Xi Jinping and Chinese Premier Li Keqiang at The Great Hall of People on March 3, 2018 in Beijing, China.
Lintao Zhang | Pool | Getty Images

China aims to expand its economy by around 6.5 percent this year, the same as in 2017, Premier Li Keqiang said in remarks prepared for delivery at the opening of the annual meeting of parliament on Monday.

The goal was kept unchanged even though the economy grew 6.9 percent last year, exceeding the government's target.

Sources previously told Reuters that China will maintain its growth target at "around 6.5 percent" this year as it seeks to reduce financial system risks while keeping the world's second-largest economy stable.

China also set its consumer price index at "around 3 percent" compared with 3 percent last year, as widely expected.

But it trimmed its budget deficit target to 2.6 percent of gross domestic product from 3 percent in 2017. Most analysts had expected the 2017 target would be largely maintained or come in slightly lower.

Li also said he expects reasonable growth in broad M2 money supply and total social financing (TSF) this year, without stating a target. Targets set for 2017 were for both TSF and M2 to grow by about 12.0 percent.

Stability will be the watchword this year as President Xi Jinping pursues his vision of turning China into a "modestly prosperous" nation by 2020 and into a "strong power" on the world stage by 2050.

Ahead of the meeting of the National People's Congress (NPC) this year, authorities have stepped up a crackdown on big-spending conglomerates, after a year of financial deleveraging that has targeted risky shadow financing and curbing corporate debt.

The NPC, which will end on March 20, is expected to approve the restructuring of various government departments and the appointment of several key officials including a vice president, vice premiers and a new central bank governor.

In a government work report, Li also said that China opposes protectionism and supports the settlement of trade disputes through negotiation, but will "resolutely safeguard" its legitimate rights and interest.

President Donald Trump announced last Thursday he would impose hefty tariffs on imported steel and aluminum to protect U.S. producers, risking retaliation from major trade partners
like China, Europe and neighboring Canada while sending global financial markets lower.