China has sent a strong signal that it is no longer chasing breakneck growth, aimed to expand its economy by 7.5 percent this year, unchanged from last year.
Policymakers are promising to pursue more sustainable expansion by reducing the pace of investment to its lowest level in a decade and waging “war” on pollution.
The world’s second-largest economy wants to reform everything from finance to the environment, even while creating jobs and wealth.
Xu Shaoshi, the newly installed head of central planning for China, said: “This year, new breakthroughs are expected for administrative reform to perfect the market system, we will carry out reforms of state-owned enterprises, financial and tax reform, urban and rural integration reform, and other reforms in key areas by building an open economic system, and an ecological civilization.”
He explained that means shutting factories, encouraging private investment and cutting government red-tape.
The rebalancing of the economy comes after 30 years of red-hot double-digit growth.
That’s lifted millions out of poverty but also saddled China with worrying levels of debt and badly polluted its air and water.
In his State of the Union style address to an annual parliament meeting, Prime Minister Li Keqiang, said: “Fostering a sound ecological environment is vital for people’s lives and the future of our nation.”
He added the fact that “pollution has become a major problem is nature’s red-light warning against the model of inefficient and blind
development”.
Proposed changes include shutting down coal-fired furnaces, boosting non-fossil fuel power and scrapping high-emission cars.
Steel and cement makers – China’s largest air polluters – will have their capacity cut, but in fact many are closing anyway due to falling demand.
“Now, it is easy to impose environmental controls because 90 percent of steel mills are losing money,” said Xu Zhongbo, a Beijing-based consultant in the metals sector.
