MercoPress. South Atlantic News Agency

China lowers growth target to 6.5% and pledges to tackle “zombie enterprises”

Premier Li Keqiang addressing the country's rubber-stamp parliament, the National People's Congress, which has gathered in Beijing for its annual session.

The Chinese growth target for this year has been cut to around 6.5%, down from 6.5 to 7% last year, Premier Li Keqiang has announced addressing the country's rubber-stamp parliament, the National People's Congress (NPC), which has gathered in Beijing for its annual session. The Chinese economy expanded at its slowest pace in 26 years in 2016.

 Mr Li said he would tackle state “zombie enterprises” producing more coal and steel than the market needed. Similar pledges in the past have proved hard to fulfill. More than 3,000 legislators are meeting in the Great Hall of the People.

The NPC and its advisory body hold ceremonial meetings every year known as “lianghui” or “two sessions”. NPC leaders are tolerating slightly slower economic growth this year to give them more room to push through some painful reforms to deal with a rapid build-up in debt, Reuters news agency reports.

State news agency Xinhua said legislators and advisers would, among other issues, discuss globalization “at a time when certain Western powers are retreating into protectionism and isolation”.

The meetings are the first since the election of US President Donald Trump, who has called for higher tariffs on Chinese imports. Xinhua also reported that national defense and relations with Taiwan, Hong Kong and Macau would be discussed.

Prime Minister Li is also expected to provide more detail about the country's defense budget, which is planned to rise by 7%. China's defense budget remains smaller than that of the US. But many China observers argue the real figure could be much higher.

The announcement marks the second consecutive year that the increase in China's defense spending has been below 10% following nearly two decades at or above that figure. It means that total spending will account for about 1.3% of the country's projected GDP in 2017, the same level as in recent years.

This year's “lianghui” comes ahead of a major Chinese Communist Party congress, due to be held later this year. That congress will confirm party chief and president Xi Jinping's second term in office, as well as announce changes in the party's top leadership.