Bond defaults, major challenges ahead, says Li

CHINA'S economy will face major challenges this year and may see more debt defaults, Premier Li Keqiang said during the closing press conference of the National People's Congress in Beijing.

In what is his only major annual meeting with the foreign press, Mr Li said that the government will focus this year on balancing growth, ensuring employment and dealing with increasing environmental pressures. "This is not going to be easy," he said to a floor of foreign and Chinese journalists.

He added that there was some flexibility in the 7.5 per cent growth target set last week, but ruled out any stimulus for the moment despite signs of a substantial slowdown in the world's second largest economy.