BEIJING 5 Mar (ANA) - China's number two leader Li Keqiang has warned the country faces "a tough struggle," as he laid out plans to prop up the world's second-largest economy.

 

Opening the annual session of China's parliament, he forecast slower growth of 6% - 6.5% this year, down from a target of around 6.5% in 2018.

 

China has struggled with a slowing economy and a US-led trade war.

 

It plans to boost spending, increase foreign firms' access to its markets, and cut billions of dollars in taxes.

 

"In pursuing development this year, we will face a graver and more complicated environment as well as risks and challenges... that are greater in number and size," Mr Li said in a lengthy speech.

 

"We must be fully prepared for a tough struggle."

 

Mr Li told 3,000 delegates at the National People's Congress that China would aim to deliver nearly 2 trillion yuan ($ 298bn; £ 227bn) of cuts in taxes and other company fees.

 

A value-added tax (VAT) for transportation and construction sectors will be sliced from 10% to 9%, and VAT for manufacturers will fall from 16% to 13%, he said.

 

China will increase its military budget by 7.5% to 1.2 trillion yuan, down from last year's 8.1% rise.

 

The country's defence spending is closely watched for any signals as to its military intentions.

 

Mr Li also said China would continue to carry out a prudent monetary policy and use reserve requirements as policy tools. China cut reserve requirements - the amount commercial banks are required to hold on reserve - several times last year to boost lending.

 

The economy expanded 6.6% in 2018, growing at is slowest rate since 1990.(ANA)

FA/ANA/5 March 2019-------