China set the lowest economic growth target in more than 15 years and flagged increasing headwinds as leaders tackle the side effects of a generation-long expansion that spurred corruption, fueled debt and hurt the environment.
The goal of about 7 percent — down from last year’s aspiration of about 7.5 percent — was given in Premier Li Keqiang’s work report at the annual meeting of the legislature in Beijing Thursday. Fiscal policy will remain proactive and monetary policy prudent, while the yuan exchange rate will be kept at a reasonable and balanced level, the government said.
Headwinds that include a property slump, excess industrial capacity and disinflation prompted the second interest-rate cut in three months at the weekend. Policymakers flagged a wider budget deficit this year of about 2.3 percent of gross domestic product, adding fiscal firepower to the monetary stimulus.
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