China's parliament today approved a new five-year plan, setting out an ambitious target of an average economic growth of 6.5-7 per cent a year by 2020. The size of China's economy is expected to exceed 90 trillion yuan (USD 13.8 trillion) by 2020, compared with 67.7 trillion yuan in 2015, according to the plan. 

China has been facing a period of slower growth and expanded at its slowest pace in 25 years in 2015. Stock market saw trillions of dollars lost last summer following unprecedented volatility. Reports in recent week have suggested China may make up to six million state workers redundant over the next few years as part of its shift away from a manufacturing to services-based economy.

Amidst this tricky transition, Premier Li Keqiang tried to reassure markets that China's economy would "not suffer a hard landing". He said China's economic growth will stay on track and added that he has full confidence in the bright future of the Chinese economy". Li assured the audience that the government still has sufficient policy options available to ensure economic growth within a reasonable range.

"We believe that with more supportive policies to boost domestic demand, the 6.5%-7.0% growth target is realistic. We expect both monetary and fiscal policy to be more pro-active in 2016. Monetary policy will be biased towards the easing side, and we forecast there will be 50bps rate cut and 350bps reserve ratio cut for the rest of 2016." said HSBC Global Research in a report to clients.

Chinese markets opened on a positive note, Shanghai Composite closed up 0.2 pct at 2,870.43 points. China's CSI300 index closed up 0.5 pct at 3,090.03 points.