China cuts GDP growth target as it pushes through reforms, de-leveraging

China set a fiscal deficit target for the year of 2.38 trillion yuan. — Reuters pic set a fiscal deficit target for the year of 2.38 trillion yuan. — Reuters picBEIJING, March 5 — China is aiming to expand its economy by around 6.5 per cent in 2017 as it continues to implement a proactive fiscal policy and maintain a prudent monetary policy, Premier Li Keqiang said today.

Top leaders at the National People’s Congress are tolerating slightly slower economic growth this year to give them more room to push through reforms to deal with a build-up in debt.

A lending binge and increased government spending last year have fuelled worries about high debt levels and an overheating housing market.

Gross domestic product grew 6.7 per cent in 2016, the slowest in 26 years, but within the government’s target range of 6.5 to 7 per cent.

China will push forward with supply-side reforms this year and achieve new progress in structural adjustments in key areas, Li said in remarks prepared for delivery at the opening of the annual meeting of parliament.

China will also take steps to control risks and ensure safety in the financial sector, the premier said.

China should have higher levels of vigilance against risks from non-performing assets, debt defaults, shadow and internet finance, Li said.

It will steadily push forward with de-leveraging this year, mainly in the non-financial corporate sector, he said.

China will also push forward with asset securitisation and debt-to-equity swaps this year.

China will continue to implement a city-based policy to reduce real estate inventories, mainly in the third and fourth-tier cities, Li said. — Reuters

Source: The Malay Mail Online

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