China’s economy isn’t headed for a hard landing and isn’t dragging on the global economy, China’s top economic planner said on Sunday, but uncertainty and instability in the global economy do pose a risk to the country’s growth.
China on Saturday acknowledged it faced tough battle to keep world’s No.2 economy growing by at least 6.5 percent over the next five years while pushing hard to create more jobs and restructuring state-owned enterprises.
The comments, as Beijing kicked off its 12-day annual national parliament, underscored the challenges facing China as its economy transitions from an investment and export focused economy to one based more on services and consumption.
“China will absolutely not experience a hard landing,” Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing. “These predictions of a hard landing are destined to come to nothing.”
China’s economy grew 6.9 percent in 2015, the slowest pace in a quarter of a century, but still comfortably the fastest among major economies.
It has set a growth target of 6.5 percent to 7 percent for this year, introducing a band rather than a hard target as it seeks greater flexibility in juggling growth, job creation and restructuring of a host of “zombie companies” in bloated industries.
On Saturday, Premier Li Keqiang outlined a series of targets on issues such as energy consumption, job creation and inflation but few details on how they would be met.
Many investors had been hoping China would post an aggressive target for fiscal spending to prop growth.
But the draft goal of running a fiscal deficit equivalent to 3 percent of GDP, while up from the previous year’s target of 2.3 percent, disappointed some. Read more