China cuts its growth target to 6.5% for 2017

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China on Saturday announced that it will increase its defence spending by around seven per cent this year, the slowest hike since 2010, even as it vowed to guard against “outside forces” interfering in its territorial disputes.

Discussing challenges his country must overcome, Li said: “We can not ignore risk factors in both economic and financial sectors”.

USA officials have described the island-building project as an attempt by China to assert military dominance in the area.

Mr Li listed a series of measures China will take this year to help clear the air, including upgrading coal-fired power plants to make them less polluting, reducing coal-fired heating, and implementing “round-the-clock monitoring” of industrial pollution.

Li warned of profound changes in the global political and economic landscape with rising protectionism and deglobalization, and said policy makers must be fully alert to building domestic risks from shadow banking to bond defaults and internet finance.

A lending binge and increased government spending have fueled worries among China’s top leaders about elevated debt levels and an overheating housing market. And t he Chinese official who led the drafting of this weekend’s government report, Huang Shouhong, head of the ruling State Council’s research department, suggested that lower than 6.5% growth could be in China’s near future.

Gen. Wang Hongguang, a retired deputy commander of the former Nanjing Military Command, called for a 12% increase of the Chinese defense budget in view of U.S. defense spending plans.

NBC News reported last month that the USA response to China’s moves in the South China Sea were becoming more aggressive as it deploys additional military hardware in the area.

Li promised to eliminate 50 million metric tons of steel production capacity.

There was a renewal of the government’s pledge to push on with reform of state-owned firms, shuttering more of the “zombie” companies, or inefficient, debt-burdened enterprises.

“China will also explain its proposition for improving global economic governance and its idea of building an worldwide community of share future, so as to create a sound external environment”, he said.

China is sensitive to criticism of its defense spending, especially from the U.S.

Turning to political affairs, Li warned Beijing would not tolerate any movement by self-ruled Taiwan’s popularly elected government toward formal independence.

The announcement marks the second consecutive year that the increase in China’s defense spending has been below 10% following almost two decades at or above that figure. Documents released at the opening session did not detail the amount of the defense budget, but a Finance Ministry official told the Associated Press it would reach $151 billion.

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Beijing’s military spending has grown by double digits nearly every for most of the past two decades.

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