CHINA should set an economic growth target of around 6.5 percent for 2017, although it is very likely that it will be able to exceed that level, the State Information Center said yesterday.

    The center is an official think tank affiliated with the National Development and Reform Commission, a powerful economic planner. It suggested the growth target in an article carried in the China Securities Journal.

    “In 2017, China’s economic operations will need to intensify efforts to alleviate deep-seated contradictions and structural problems,” the think tank said, singling out the property market, social capital and regional financial risks as among its concerns.

    China’s economy grew 6.7 percent in the third quarter from a year earlier and looks set to achieve the government’s full-year forecast of 6.5-7 percent, buoyed by higher government spending, a housing boom and record bank lending.

    However, growing debt and concerns about property bubbles have touched off an internal debate about whether China should tolerate slower growth in 2017 to allow more room for painful reforms aimed at reducing industrial overcapacity and indebtedness.

    The government has said growth of at least 6.5 percent is needed each year through to 2020 to meet a previously stated goal of doubling gross domestic product and per capita income by then, from 2010 levels.(SD-Agencies)

    China to push reforms in 2017, financial risks rising

    CHINA will forge ahead with supply-side reforms next year to deal with overcapacity and structural problems, while also moving to boost demand, the Xinhua news agency reported Friday.

    Top leaders are due to map out an economic and reform agenda for 2017 during an annual Central Economic Work Conference later this month.

    “The economy still faces many outstanding contradictions and problems, excess capacity and structural upgrading contradictions remain prominent,” Xinhua said, citing a statement after a meeting of the Politburo, a top decision-making body of the ruling Communist Party.

    “Financial risks in some areas are emerging and some regions face relatively big difficulties. We should attach great importance to these issues and try to solve them.”

    China will push State sector reforms and fiscal reforms, and establish long-term mechanisms to promote the healthy development of the property sector, Xinhua said.

    Premier Li Keqiang said earlier last week that China will reach its key economic targets this year, which will lay a good foundation for 2017.

    The government aims for 6.5-7.0 percent growth this year.

    China will also further open its economy in 2017 and work to attract foreign investment, Xinhua said.

    President Xi Jinping told the meeting that he was certain that China would meet its key economic targets for 2016, Xinhua said.

    China’s economy has performed better than many analysts expected this year, supported by higher government infrastructure spending and a housing market boom that is starting to show signs of fatigue.

    Xi also said China will also strengthen its national security.

    (SD-Agencies)

    China ‘should aim for stable yuan, no rate hike needed’

    CHINA should focus on stabilizing the yuan and there is no need to raise interest rates, an adviser to the People’s Bank of China said in a media interview published yesterday.

    “It’s neither necessary not likely to raise interest rates at the present, given that the economy has just stabilized and liquidity may get tight towards the year-end,” Sheng Songcheng told the financial newspaper China Business News.

    The urgent priority now is to stabilize yuan expectations and break the currency’s one-way downward trend, as a depreciating yuan might prompt firms to pre-emptively purchase foreign exchange to repay short-term foreign debt, Sheng said.

    Individuals may also rush to buy foreign exchange, adding to the yuan’s downward pressure, he added.

    In the longer term, the central bank should watch China’s economic performance and inflation data, as well as the pace of interest rate rises by the U.S. Federal Reserve, to see if it needs to raise interest rates, Sheng said. The Fed is expected to increase rates this week.

    Earlier this month, Sheng reiterated his view that China should use part of its foreign reserves to support the yuan, and added that he believed the central bank could also raise interest rates “gradually.”

    The yuan has fallen 6 percent against a broadly strengthening dollar so far this year.

    (SD-Agencies)