Growth at least 6.5%: ex­perts Spokesman’s words

China Daily (Canada) - - FRONT PAGE - By LI XIANG in Bei­jing lix­i­ang@chi­

China must pre­vent its eco­nomic growth from fall­ing below 6.5 per­cent this year, lead­ing econ­o­mists said on Wed­nes­day.

They were speak­ing ahead of the open­ing of the an­nual meet­ings of the coun­try’s top leg­is­la­ture and political ad­vi­sory body this week.

Jia Kang, a mem­ber of the Chi­nese Peo­ple’s Political Con­sul­ta­tive Con­fer­ence Na­tional Com­mit­tee, said the na­tion’s econ­omy is likely to bot­tom out at about 6.5 per­cent this year be­fore sta­bi­liz­ing.

This was a level that China must hold to and the econ­omy could not af­ford growth to fall below 6.5 per­cent, said Jia, a for­mer re­searcher at the Min­istry of Fi­nance.

China’s growth tar­get and de­tails of re­form to shore up the econ­omy will be watched closely as the an­nual meet­ing of the CPPCC Na­tional Com­mit­tee opens on Thurs­day.

The coun­try’s top leg­is­la­ture, the Na­tional Peo­ple’s Congress, will con­vene on Satur­day, as law­mak­ers gather in Bei­jing to elab­o­rate on the Govern­ment Work Re­port and re­form poli­cies be­fore giv­ing their ap­proval.

It is widely ex­pected that the top lead­er­ship will place pri­or­ity on sta­ble growth with the em­pha­sis on sup­ply-side re­form, aimed at trim­ming over­ca­pac­ity and lift­ing tax bur­dens on com­pa­nies.

Ac­cord­ing to ob­servers, law­mak­ers and political ad­vis­ers will likely en­dorse a growth tar­get of 6.5 to 7 per­cent for this year and a more proac­tive fis­cal pol­icy with a higher deficit and more tax and fee cuts.

“China will have to raise its fis­cal deficit above 3 per­cent of its GDP this year to en­sure growth,” Jia said.

On Wed­nes­day, Wang Guo­qing, spokesman for the an­nual ses­sion of the CPPCC’s Na­tional Com­mit­tee, ruled out a hard land­ing for the econ­omy. “China is ca­pa­ble of main­tain­ing medium to high growth, as the long-term eco­nomic fun­da­men­tals re­main un­changed and there is am­ple room for the govern­ment to ma­neu­ver,” he said at a news con­fer­ence in Bei­jing.

Chang Jian, chief China econ­o­mist at Bar­clay’s Cap­i­tal, agreed with Jia’s com­ment in a re­search note, say­ing that the top meet­ings would likely pro­duce an up­side sur­prise on China’s fis­cal pol­icy.

This would be mod­er­ately ex­pan­sion­ary, with the gen­eral govern­ment deficit re­main­ing at about 3.5 per­cent of GDP for this year and next, she said.

Chang added that China’s mon­e­tary pol­icy would con­tinue to be char­ac­ter­ized as “pru­dent” but “mod­er­ately loose”, and fur­ther eas­ing could be ex­pected to sup­port the hous­ing mar­ket and pri­vate con­sump­tion.

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