China's growth forecast to slow further next year

BEIJING • China's economy in 2016 still faces relatively large downward pressure and the speed of economic growth may fall further, said a top planning body's think-tank, recommending more monetary policy easing, the Economic Daily reported yesterday.

The National Development and Reform Commission's (NDRC) think-tank recommended that China's government continues to cut interest rates and banks' reserve requirement ratio to bolster flagging growth. China should also give way to pressure on yuan depreciation in order to boost exports, the think-tank said.

Beijing has been struggling to reach its economic growth target of around 7 per cent this year, despite a raft of policy-easing steps in recent months.

China's top leaders have started an annual meeting to map out economic and reform plans for 2016, state media reported last Friday. The central bank has also been notable for its lack of a response to the US Federal Reserve's interest rate hike last Wednesday.

The NDRC think-tank predicted that investment growth could fall to about 9 per cent in 2016. From January to November this year, fixed-asset investment growth has been 10.2 per cent year-on-year.

Real estate investment may be flat, the report said.

Consumption growth could face a year of single-digit growth in 2016, while exports may grow slightly, said the think-tank. It recommended expanding China's fiscal deficit to support major projects and possibly issuing more central and local government bonds.

The stock market should be stabilised and efforts made to fend off the risk of large-scale capital outflows, it also proposed.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 21, 2015, with the headline 'China's growth forecast to slow further next year'. Print Edition | Subscribe