China Signals ‘New Normal’ with Higher Spending, Lower Growth Target

China Signals ‘New Normal’ with Higher Spending, Lower Growth Target

In this Sept. 22, 2014 photo provide by China's Xinhua News Agency, Chinese President Xi Jinping, front right, meets with a delegation of Hong Kong's industrial and business circles headed by Tung Chee-hwa, left front, in Beijing, capital of China. (AP Photo/Xinhua, Rao Aimin)
In this Sept. 22, 2014 photo provide by China’s Xinhua News Agency, Chinese President Xi Jinping, front right, meets with a delegation of Hong Kong’s industrial and business circles headed by Tung Chee-hwa, left front, in Beijing, capital of China. (AP Photo/Xinhua, Rao Aimin)

 

(Reuters) – China plans to run its biggest budget deficit in 2015 since the global financial crisis, stepping up spending as Premier Li Keqiang signalled that the lowest rate of growth in a quarter of a century is the “new normal” for the world’s No.2 economy.

Speaking at the opening of the country’s annual parliamentary meeting on Thursday, Li announced a growth target of around 7 percent for this year, below the 7.5 percent goal that was narrowly missed in 2014.

“The downward pressure on China’s economy is intensifying,” Li told around 3,000 delegates gathered at the Great Hall of the People to the west of Beijing’s Tiananmen Square.

“Deep-seated problems in the country’s economic development are becoming more obvious. The difficulties we are facing this year could be bigger than last year.”

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