China has recently set a new economic growth target ranging from 6.5 percent to 7 percent for 2016 even when the central government is struggling to manage an economic slowdown.
Considered to be the world’s second- largest economy, China is now experiencing an economic slowdown. But just recently, they have released a new economic growth target range, which were a few notches below what they posted last year. This is the first time that Beijing has announced a target range for its economic growth since 1995. It reflects a great change from the government who previously set specific numbers to hit for their economic growth.
After decades of expansion, China’s economy is now slowly losing its pace. The economy that was once considered as the second largest is experiencing an economic turmoil. The central government is now trying to shift its course away from manufacturing and debt- fueled investments towards consumer spending and services sector.
According to the National Development and Reform Commission Chief XuShaoshi, there was a growth of a 6.9 percent in the economy last 2015 and a high volume of merchandises imported from China, which according to him, is contributing to the global economic strength. This has been said even if the central government has just lowered its growth target rate from last year’s announcement.
However, according to CNN, its country’s currency, Yuan has fallen in value against the dollar.
China’s Economic Concerns
According to Premier Li Kequiang, China will face even tougher problems and challenges as it goes through its economic growth. So they should be fully prepared to fight a challenging battle.
Mr. Li also said during his speech last Saturday that China was targeting consumer inflation growth at around 3 percent and unemployment growth to only within 4.5 percent. There were plenty of speculations about painful reformation to state-owned enterprises that are completely inefficient to cut overcapacity.
Rising Unemployment Rate
A rising unemployment rate is also a big concern as Beijing is slowly shifting its economy towards services and consumer spending, instead of manufacturing and industry. This could mean that thousands of people will lose their jobs because of this sudden shift. Some of the government officials claimed that about 1.8 million workers were expected to be on unemployment in both the steel and coal industries.
Presidential Xi Jinping recently had a tour that was broadcasted throughout the main Communist Party newspaper, the state television, and even the state news agency, demanding complete and absolute loyalty to the Communist party and its leadership in thought, action and most especially, politics.
According to the official news agency in Xinhua, China has 150,000 state- owned enterprises, created over 30 million job vacancies and still has more than 100 trillion Yuan in assets.