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China lowers growth target amid trade and debt fears

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China lowers growth target amid trade and debt fears
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China is lowering its economic growth targets as it struggles with a US trade war, a slowing global economy and a crackdown on debt.

Premier Li Keqiang told the National People's Congress that the government is cutting taxes, boosting infrastructure investment and stepping up lending in a bid to shore up the country's slowing economy.

Beijing is targeting 2019 growth of 6.0 to 6.5 percent, down from the 6.6 percent gross domestic product reported for 2018 - itself the slowest growth in almost 30 years.

But economist Alicia Garcia-Herrero from the Bruegel think tank downplayed concerns about China's slowdown, saying that the economy is already recovering.

"Li Keqiang's speech shows how determined the Chinese government is to help that recovery come along...And this supposedly low target for growth that markets are interpreting as the end of the world - 6.0 to 6.5 percent - is actually high to me in the sense that this is just the natural structural slowdown that China would have had otherwise."

But with the economy losing steam, VAT and social security fees will be cut, in a bid to stave off job losses and the related risk of unrest.

Li said Beijing is closely monitoring the job situation at exporting companies heavily exposed to the US market. The government aims to create more than 11 million new urban jobs this year and keep urban unemployment below 4.5 percent - unchanged from last year.

Meanwhile, US-China trade talks are ongoing and Beijing's work report published on Tuesday stresses the government's commitment to promoting the negotiations and safeguarding economic globalisation and free trade. China will work toward mutually beneficial cooperation, win-win development and settling trade disputes through discussions as equals, the report says.

US Secretary of State Mike Pompeo said on Monday that the two nations are "on the cusp" of a breakthrough to end the trade war.