China will cautiously chart the economic path in 2017 as the world's second largest economy slashed its projected economic growth rate for the current year to a new low. The cut in the country's projected economic growth rate was more or less expected after the Chinese economy endured nothing short of an economic tsunami last year.

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As the Chinese Premier Li Keqiang opened the National People's Congress on Sunday, he set the modest target of 6.5 percent for the Chinese economy in 2017, a small modification from the last year's target of 6.5 to seven percent.

Li said that 6.5 percent growth target is needed to "achieve the employment objective," highlighting the Chinese government's seriousness about generating employment following its decision last year to cut down on scores of jobs across so-called zombie factories.

To achieve the projected growth rate, the government is planning to trim down its annual fiscal deficit to three percent from last year's 3.8 percent. The ambitious fiscal deficit target clearly indicates that the government will spend sparsely on infrastructure projects and tighten stimulus packages for the current year.

Last year, China zealously spent on stimulus packages and infrastructure investment in a desperate bid to stimulate its declining economy. But the overspending ballooned the country's debt to a precarious level that left several economists immensely worried.

China's serious concern about the rising fiscal deficit is clearly signified by the fact that its military budget is set to grow in single digit in the current year for the second year in a row. Besides, last week the Asian giant hired die-hard reformer Guo Shuqing as the banking regulator chief to bring down the alarming debt levels in the banking sector.

The lower growth target for the current year means that the Chinese economy will have to endure another tough year. But Li argued that the pain accompanying these challenges will yield satisfying results in the long run.    

"Like the struggle from chrysalis to butterfly, this process of transformation and upgrading is filled with promise but also accompanied by great pain," Li said.

The Chinese economy grew by merely 6.7 percent in 2016, the slowest growth rate in over 26 years. The immensely slow growth rate compelled the panic ridden government to ensure that the second largest economy would not head towards a hard landing at any cost.

Some much-needed positive news arrived for the Chinese economy during the last few weeks, with exports and manufacturing activities in January and February beating most analyst's expectations. However, economists claim that these data are not strong enough to indicate that the Chinese economy is heading towards sustained recovery.   

TagsChinese Economy, Li Keqiang, china, China Economic Growth Rate, China 2017 Outlook