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China has proposed a national fiscal deficit of 3 per cent at 2.18 trillion yuan (HK$2.6 trillion) this year.

Defence spending in 2016 is budgeted to rise 7.6 per cent to

954.4 billion yuan, down from a 10.1 per cent increase budgeted last year.

The central government also plans to spend 166.8 billion yuan – a rise of 5.3 per cent from last year – on public security.

The consumer price index target was set at 3 per cent this year, compared with the actual rise of 1.4 per cent in 2015.

The government also proposed a gross domestic product target of 6.5 to 7 per cent for 2016.

A target range, instead of a specific number, reflects Beijing’s dilemma between pursuing economic growth and pushing ahead with reforms.

Last year, it targeted growth of “about 7 per cent” when actual GDP growth slowed to 6.9 per cent, the lowest in a quarter of a century.

On Friday, Premier Li Keqiang said the deficit ratio to GDP would increase “by a relatively big margin,” the official Xinhua News Agency reported.

Li made the remarks when he met delegates in the economy and agriculture sectors of the Chinese People’s Political Consultative Conference.

He said the newly increased deficit would mainly be used to reduce taxes for enterprises and safeguard social welfare.

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