China says 7% growth target can be met

A plastics factory in Shanghai. Factories are producing less on falling exports, contributing to downward pressure on China's economy. The National Development and Reform Commission, the state's top economic planner, said China has plenty of policy room a
A plastics factory in Shanghai. Factories are producing less on falling exports, contributing to downward pressure on China's economy. The National Development and Reform Commission, the state's top economic planner, said China has plenty of policy room and options to achieve its growth target. PHOTO: REUTERS

SHANGHAI • China's top economic planner said the government has plenty of policy room and options to achieve its annual growth target, expected to be around 7 per cent, despite downward pressure on the economy.

The National Development and Reform Commission (NDRC) said in an online press statement yesterday that the "economy will continue to operate within a reasonable range in the latter half of the year, the overall stable momentum will not change and annual growth is expected at around 7 per cent".

The commission attributed the economic "soft patch" to the cooling property market and falling external demand amid tepid global recovery, Xinhua reported.

It said fresh pressure from capital market volatility this summer, currency devaluation in emerging markets, and slumping global commodity prices are further muddying growth prospects.

"The current slowdown is natural. The factors that have underpinned breakneck growth in the past, such as the large number of those in the working-age population and hefty resources, have undergone significant changes," Mr Zhong He from the agency's policy research office wrote in the release.

The statement comes a day after a top government think-tank predicted that China's economic growth will likely slow to 6.9 per cent this year. The Chinese Academy of Social Sciences (CASS) said in its "blue book" report on Monday the slowdown was due to falling investment by firms and individuals, and growing debt pressures faced by local governments, the Shanghai Securities News reported.

The report urged the reining in of overspending and "lazy" regional governments, diversification of sources of fiscal revenue, as well as tax cuts and fiscal reforms.

China has been dealing with downward pressure on its economy, with falling exports and low manufacturing. A stock market rout and surprise currency devaluation last month triggered a global sell-off in commodities, equities and emerging market currencies.

But Premier Li Keqiang had said China had many policy tools to manage its slowing economy.

The CASS report urged more time for development and transformation of China's financial markets.

The National Bureau of Statistics had earlier this month revised China's economic growth last year to 7.3 per cent, down from 7.4 per cent, its slowest rate in 24 years.

The economy expanded 7 per cent in the second quarter.

The NDRC statement sought to reassure markets that China's policies will help stabilise investment growth to offset the impact of sluggish exports, and a recovering property market and booming service industry will also contribute to growth, even though difficulties for traditional industries will persist.

"Having said that, China will see an increase of jobs and mild inflation in the coming months, and major growth targets for 2015 will be realised," the agency statement said.

XINHUA, REUTERS

A version of this article appeared in the print edition of The Straits Times on September 23, 2015, with the headline 'China says 7% growth target can be met'. Print Edition | Subscribe