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China sets 2018 GDP growth target at around 6.5%

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China sets 2018 GDP growth target at around 6.5%

China aims to expand its economy by around 6.5%, which is the same as the 2017 goal, Premier Li Keqiang said in his report at the 13th National People's Congress on March 5. This year's statement, however, deleted the objective for output growth to be "higher if possible in practice."

China's economy expanded at 6.9% in 2017, beating the 6.5% target.

Li promised to create 11 million new jobs in 2018, the same as in 2017 and keep the registered urban unemployment rate under 4.5%, unchanged from 2017. The government also set consumer prices to rise about 3%, the same as in 2017.

On fiscal policy, Li said China aimed to reduce its budget deficit target to 2.6% of GDP in 2018 from 3% in 2017.

The state planning agency said in a separate report that M2 money supply and broad credit growth, known as total social financing, would grow at a similar pace as in 2017. TSF grew 12% in 2017, while M2 grew at 8.2%.

Li said that China would maintain a "prudent" monetary stance, having a neither too loose nor too tight monetary policy, reported Reuters.

For 2018, China targeted retail sales growth of about 10% and the yuan exchange rate to remain stable at an equilibrium level, Bloomberg News reported.

China will cut about 30 million tons of steel capacity, compared with the 50-million-ton goal in 2017. Defense spending is expected to rise by 8.1%, the quickest pace in three years, said Bloomberg.

At the 19th Party Congress in November 2017 where he consolidated power, President Xi Jinping set a policy path focused on high-quality growth that aims to curb financial risk, alleviate poverty and reduce pollution.