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Chinese economy effectively turning the corner, says chief planner

Published on Nov 10, 2012 9:54 PM

BEIJING (REUTERS) - China announced on Saturday that its economy is effectively turning the corner, and that it is likely to meet its growth target for the year.

The world's second-biggest economy has halted a slowing trend, the head of the powerful economic planning agency said, adding he was confident GDP growth would exceed 7.5 per cent this year.

Mr Zhang Ping, head of the National Development and Reform Commission (NDRC), was speaking to reporters on the sidelines of the 18th Party Congress where outgoing President Hu Jintao said China should double its 2010 GDP and per capita income by 2020, as previous targets have implied.

Mr Hu said China's development should be "much more balanced, coordinated and sustainable".

"Signs of stabilisation in the economy were getting more obvious in October. We are fully confident that we can achieve the economic growth target for this year. In other words, we are able to maintain economic growth of above 7.5 per cent," Mr Zhang said.

China's economy strode further along the road of recovery from its slowest growth in three years, data for October showed on Friday, as infrastructure investment accelerated and output from factories ran at its fastest in five months.

Data on Saturday showed China's trade surplus ballooned to its biggest in 45 months last month as export growth darted to a five-month high above 11 per cent, surpassing expectations and adding to other data that suggest a less urgent need for new economic stimulus measures.

The figures provided further signs for the country's top policymakers meeting in Beijing to anoint new leaders for the coming decade that a long slide in economic growth may be over.

Annual economic growth slowed to 7.4 per cent in the third quarter - its weakest since early 2009 - leaving the world's second-largest economy on track to mark its most sluggish year since 1999.

Central bank head Zhou Xiaochuan cautioned on Thursday, however, that external risks still loomed large, and the People's Bank of China had policy room to respond if necessary.

Mr Zhang said China's economic slowdown this year had been caused by both weak global demand and government steps to adjust economic structures to put the economy on a more sustainable footing for the future.

Government officials have said repeatedly that they intended to use a period of slowing growth to make a series of adjustments to economic policy settings, particularly around prices administered by the state, that might otherwise risk fuelling inflation.

Such reforms are regarded as crucial, both by foreign analysts and government think-tanks, if China is to maintain robust growth needed to close a yawning wealth gap and support an urbanisation drive core to Beijing's development plans.

Mr Zhang said inflation was stable in China. Official data on Friday showed consumer price inflation eased to its slowest pace in nearly three years last month, with the 1.7 per cent rise from a year ago slower than the 1.9 per cent posted in September.

Economists polled by Reuters had expected it to hold steady.