China sure to meet full-year economic targets, Premier Li Keqiang says

Chinese Premier Li Keqiang speaks during a joint news conference with Portuguese Prime Minister Antonio Costa at the Great Hall of the People in Beijing.
Chinese Premier Li Keqiang speaks during a joint news conference with Portuguese Prime Minister Antonio Costa at the Great Hall of the People in Beijing. PHOTO: REUTERS

BEIJING (BLOOMBERG) - It's mission accomplished for China's economy.

China is confident it will achieve its major full-year targets and tasks, Premier Li Keqiang said at a seminar in Beijing, according to state media reports late on Tuesday (Nov 15).

China should stabilize and improve macro policies and will expand aggregate demand moderately, Li said. He called for steadying employment and promoting innovation.

The economy's stabilization this year has come on the back of easy monetary policy and a ramp up in fiscal support, ensuring the government's full-year growth target of 6.5 per cent to 7 per cent will be met.

Policy makers are now turning attention to reining in excesses spurred by such stimulus, including debt risks and surging home prices in major cities.

"With real economic activity now better stabilized in general and the government still concerned about the need for financial and macro risk controls, October's property strength may induce a further tightening of property policies," economists led by Wang Tao at UBS Group in Hong Kong wrote in a recent note. "We see no change to benchmark interest rates through 2018."

Donald Trump's election victory has complicated China's policy outlook, with threats to slap tariffs of up to 45 per cent on imports from the nation and label China as a currency manipulator.

"Uncertainties have increased abroad. Regions and industries have diverged at home. Both pose relatively big challenges to the economy," Li was quoted as saying.

Authorities may allow slightly more yuan depreciation as the US dollar strengthens post election, Wang at UBS and her team wrote.

A weakening yuan, while offering no sustained boost to exporters in the face of tepid global demand, has at least cushioned the blow on their local currency earnings. Meantime, four years of factory deflation has also abated, boosting industrial profits.