China warns of 'tough struggle' ahead after lowering growth targets

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Many criticized the government's efforts in late 2017 and early 2018 as overly harsh, causing authorities to reverse their tone in the second half of past year with announcements of stimulus plans. The country managed an economic growth rate of 6.6 percent in 2018.

China will control the pace and intensity of its structural deleveraging efforts, the National Development and Reform Commission (NDRC), the state planner, said in its report also released today.

China has unveiled a $298 billion tax cut plan in order to prop up its slowing economy after US President Donald Trump launched a trade war against Beijing.

China aims to maintain consumer inflation level at around 3 percent and create over 11 million new urban jobs.

Trade tensions with the USA escalated past year after President Donald Trump announced additional tariffs on $250 billion worth of goods from China, and Beijing countered with its own duties on $110 billion worth of US goods.

However he still said the government wanted to promote IT, high-end equipment, biotech and next-gen automobiles and touted 'Buy China'.

In a rare admission of weakness from the Chinese state, Premier Li Keqiang said that the trade war with the United States, which has seen both countries swap tit-for-tat tariffs on a combined $360 billion of goods, was having a material negative impact on the economy.

The target budget deficit for 2019 was set at 2.8 percent of GDP, versus last year's goal of 2.6 percent. At the same time, it will cut the social security fees paid by companies.

According to reports, the 2019 defence budget will be 1.19 trillion yuan (about $177.61 billion), according to a draft budget report to be submitted at the opening of the annual session of China's Parliament, the National People's Congress (NPC), on Tuesday.

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The rate marks a fourth straight year for the budgeted growth rate to dip into the single digit since 2016, following five consecutive years of double-digit increases.

Further cuts to the required reserves ratio for smaller banks are planned, according to the work report.

China will monitor more closely the job situation at exporting companies heavily exposed to the USA market, Li said.

Military reforms are almost complete, and "China needs the money to be used for more urgent matters", he said.

Of China's 31 provinces, regions and municipalities, 24 have already lowered their growth targets for this year, especially export-driven coastal areas.

A balance will be struck between stabilising economic growth and fending off risks, it said. This year, Li also did not announce any targets for growth in retail sales or fixed asset investment.

Since entering a trade war with the U.S., where issues of emerging technology and protectionism of high-tech industries has been a key point of contention, Chinese leaders and media have downplayed Made in China 2025.

Separately, China's top banking regulator said on Tuesday that Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector.