2015 growth for China expected to be about 7%

Coins from coin-operated laundry machines being counted at a warehouse in Henan province, China, on Monday. Some observers believe real growth levels in China are much weaker than official data suggest, reinforcing expectations that the government wi
Coins from coin-operated laundry machines being counted at a warehouse in Henan province, China, on Monday. Some observers believe real growth levels in China are much weaker than official data suggest, reinforcing expectations that the government will have to roll out more support schemes this year.PHOTO: REUTERS

13 million jobs added as country met main economic targets, says top planning agency

BEIJING • China's economy likely grew by around 7 per cent last year and added 13 million jobs, the top economic planning agency said as it announced the approval of more large infrastructure projects to avert risks of a sharper slowdown.

China achieved its main economic targets last year, Mr Li Pumin, a spokesman for the National Development and Reform Commission, told a news conference yesterday, a week before the release of official fourth-quarter and full-year 2015 figures.

The comments come as a renewed plunge in Chinese stock markets and a sharp slide in the yuan have stoked concerns among global investors about the health of the world's second-largest economy, though there is little evidence that conditions in China have deteriorated dramatically in recent weeks.

Still, growth of 7 per cent would be the slowest in a quarter of a century, and down from 7.3 per cent in 2014 as weak demand at home and abroad, industrial overcapacity and faltering investment weigh on the Chinese economy.

Some China watchers believe real growth levels are already much weaker than official data suggest, reinforcing expectations that the government will have to roll out more support measures this year.

Growth of 7 per cent would be the slowest in a quarter of a century, and down from 7.3 per cent in 2014 as weak demand at home and abroad, industrial overcapacity and faltering investment weigh on the Chinese economy.

China approved 280 fixed asset investment projects worth 2.52 trillion yuan (S$550 billion) last year, Mr Li said. Thirty-two projects worth 515.1 billion yuan were approved last month alone. The government has flagged that it intends to spend more on infrastructure to shore up economic activity, but it has faced delays, partly due to slow loan distribution, poor initial planning and high local government debt levels.

"I think there is little connection between the falling stock markets and the real economy," said economist Shen Lan at Standard Chartered Bank in Beijing. "Actually, economic indicators in November already showed the economy gained more momentum."

Working to restore investor confidence in the government's regulation of markets, China's Cabinet has created a new department to coordinate financial and economic affairs, according to a person familiar with the matter.

The department under the State Council's general office is tasked with coordinating between China's financial and economic regulators and gathering data from local offices, said the person, who asked not to be named because the move has not been announced publicly.

Agricultural Bank of China vice- president Li Zhenjiang was tapped as deputy director responsible for its daily operations and took up the new post last week, the person said.

Previously, State Council oversight of finance and securities fell to a department that handled a host of other issues including land, environmental protection and tourism.

It is not clear how much power the new department will have, given that President Xi Jinping manages the Central Leading Group on Financial and Economic Affairs, a separate body steering financial policy.

A commentary published in the Procuratorial Daily, the paper of the top prosecuting body, said responsibility should be taken for the circuit breaker system, which had to be abandoned after stock slides twice halted trading for the day last week.

"The negative effects, huge losses and damages to the economy caused by a wrong decision need someone to take the responsibility," the commentary said.

"The key reason in the authorities making random decisions is the lack of regulation and the difficulty of accountability."

REUTERS, BLOOMBERG

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A version of this article appeared in the print edition of The Straits Times on January 13, 2016, with the headline '2015 growth for China expected to be about 7%'. Print Edition | Subscribe