China to reduce growth rate and combat pollution

The Premier of China Li Kequiang told the delegates at the opening of the National People's Congress that he would make the smoggy skies in many cities blue again and pledged to work more quickly to address pollution problems.

	1 of 2
China burns a great deal of coal to produce both heat and electricity contributing to the pollution problem in many cities. Public discontent over the lack of progress in tackling China's pollution problems has resulted in the issue becoming a priority for leadership of the Communist Party. Fortunately, the 10 day event attended by 3,000 members of the parliament got under way under blue skies as heavy gusts from the north blew away the grey smog that covered Beijing just the day before.

The situation has grown so bad that protests have broken out as residents have opposed the building of chemical plants and garbage incinerators as the population becomes more aware of the dangers of the continuing pollution. Premier Li said that the people were hoping for faster progress in improving air quality and promised. "We will make our skies blue again".

Li said the government would work to upgrade coal-fired power plants to achieve ultra-low emissions but would also prioritize integration of renewable energy sources into the energy grid. However, China is also lowering growth targets as it tries to become more reliant on a consumer driven economy rather than depending on exports. China is planning to cut steel production to reduce surplus production. The target for growth was around 6.5 percent or higher if possible according to the report by Li. This would be a bit lower than last year's rate of 6.7 per but still among the world's strongest growth.

Li pointed out that growing debt levels could pose a threat to future growth rates. Li also noted: "Both the de-globalisation trend and protectionism are growing. There are many uncertainties about the direction of the major economies' policies and their spillover effects, and the factors that could cause instability and uncertainty are visibly increasing." Song Lifang an economist at the Renmin University of Peking said that Trump's tough policies could hurt China but would have a limited effect, saying: "With China's domestic economy still in the phase of transformation, the tasks for China's economic growth are arduous but with great potential."

The Li report calls for 11 million new jobs, one million more than last year's target. Reform advocates complain that state companies still control many industries and benefit from monopolies and low cost bank loans making it difficult for entrepreneurs to compete. China promised foreign companies would get equal treatment to their Chinese counterparts after complaints by the US and European groups that the Chinese were trying to squeeze foreign companies out of some markets. However, the rhetoric contrasts with that of Donald Trump who promises to put America first. Although China is increasing its military spending by about 7 percent this is still considerable lower than the US which will increase spending by $54 billion or 10 percent.

China hopes to cut steel production by 50 million tonnes and coal output by more than 150 million tons this year. In a report the National Development and Reform Commission (NDRC) said it would shut or stop construction of coal-fired power plants with a combined capacity of more than 50 million kilowatts. The reduction is a continuation of moves to reduce the share coal plays in energy production and help cut pollution in a number of cities particularly in the north. The cut backs will also help meet climate-change goals while streamlining unwieldy and over-supplied smoke-stack industries such as steel.Premier Li said:"Officials who do a poor job in enforcing the law, knowingly allow environmental violations, or respond inadequately to worsening air quality will be held accountable." In its report, the NDRC said it would cut energy consumption per capita by 3.4 percent and curb carbon intensity by 4 percent this year. In 2016 China far exceeded its goal of eliminating 250 million tons of coal output and 45 million tonnes of steel capacity.