China Intends To Set 2020 Economic Growth Target Of Around 6% Amid US Trade War

Beijing plans to set an economic growth target of around 6% in 2020 for the world's second-largest economy, Reuters reported Saturday. The Chinese government plans to use infrastructure spending to stimulate the economy amid an ongoing trade war with the U.S.

"We aim to keep next year's growth within a reasonable range, or around 6%," one anonymous source told the news agency. The proposed target will be announced publicly in March 2020 during China's annual parliamentary session.

China will use monetary policy to encourage lending as an economic stimulus. Beijing might also grant local Chinese governments the right to issue more special bonds. "Fiscal policy will provide a key support for the economy," another source said. China will likely not enact a comprehensive stimulus policy in order to keep debt levels in check.

The U.S. and China announced Friday that they had reached a "Phase One" trade deal, which provides some tariff relief for the Chinese economy in exchange for Beijing buying U.S. agricultural products. The deal will need to undergo some more legal analysis before it is signed next month.

In July, the Chinese government recorded the slowest growth rate in 27 years amid the ongoing trade war. Trump boasted about the news, saying that the U.S. tariffs "are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving."

The Trump administration has initiated the trade war to prevent cheap Chinese exports from flooding the international market. Washington has also labeled Beijing as a "currency manipulator." The tariffs have put pressure on the U.S. agricultural sector and have caused some retailers to say they will raise prices.