China can control risks, hit 2017 growth target: Li

DALIAN: China is capable of achieving its full-year growth target and controlling systemic risks despite challenges, Premier Li Keqiang ( pix) said yesterday, adding that maintaining medium to high-speed long-term growth will not be easy.

Beijing targets economic growth of around 6.5% in 2017, compared with the 6.7% pace delivered in 2016 – the slowest in 26 years.

In a speech at the World Economic Forum (WEF) in the northeastern city of Dalian, Li said the Chinese economy remains steady in the second quarter, as domestic demand has become a key pillar for the world’s second-largest economy.

“China’s economy in the second-quarter maintained the first-quarter’s steady and improving momentum. We are fully capable of achieving the main economic targets for the full year,” Li said.

“Currently, China also faces many difficulties and challenges, but we are fully prepared,” he said.

China’s economy, which grew a robust 6.9% in the first quarter, generally remained on solid footing in May, but tighter monetary policy, a cooling housing market and slowing investment reinforced views that it will gradually lose momentum in coming months.

Beijing has been taking steps to identify and resolve financial risks, which remain generally under control, Li said.

Among those risks is high levels of debt, which recently prompted Moody’s to cut its sovereign credit rating on China. Li said that the capital adequacy ratios and provisions for bad loans at Chinese banks were at relatively high levels.

“There are indeed some risks in the financial sector, but we are able to uphold the bottom line of no systemic risks,” he said. “We are fully capable of preventing various risks and making sure economic operations will be within a reasonable range.”

Li also said Beijing will facilitate foreign investment by relaxing restrictions on how much overseas firms can own of China ventures and making it easier for them to register new companies locally.

Also in his speech, Li said “free trade is the precondition of fair trade” as he hailed the benefits of globalisation ahead of the G20 summit of leaders from the world’s major economies next month.

“Restricting free trade will bring unequal trade. Globalisation brings benefits to all,” Li said. – Reuters, dpa