CHINA PREMIER LI KEQIANG: SETS 2016 GDP TARGET AT 6.5-7.0% (AS EXPECTED) vs "around 7%" 2015 target and 6.9% actual 2015 GDP
- Sets 2016-20 annual GDP of at least 6.5%
- Maintains 2016 CPI target around 3%.
- Maintains 2016 budget deficit target of 3% of GDP with fiscal deficit seenat CNY2.18T.
- M2 money supply target set at 13% v 12% target in 2015.
- Retail Sales target set at 11% v 13% target in 2015.
- Fixed Asset Investment to rise 10.5% v 15% target in 2015.
- Fiscal spending to rise 6.7%
- Maintains target to create 10M new jobs this year and keep urban unemployment rate below 4.5%.
- Defense budget to grow 7.6%
- Aims for 2016 local govt budget deficit of CNY780B.
- Downward pressure on economy is increasing.
- Aim to expand domestic consumption.
- Plan to deepen reform of financial sector; to continue reform of state owned commercial banks.
- Monetary policy is prudent with flexibility; To continue proactive fiscal policy.
- Plan to further liberalize interest rates.
- To use various policy tools to maintain liquidity.
- To resolve overcapacity in industry, with focus on steel and coal.
- To begin Shenzhen-Hong Kong stock connect at "appropriate time".
- To keep CNY exchange rate "basically stable"; To encourage Yuan investment overseas.
- Expect to achieve its economic and social development targets despite facing greater difficulties and challenges this year.
- To invest over CNY800B in railway construction.
- Plan to gradually reduce residential housing inventory.
- To expand trials of free trade zones.