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China economy

China likely to target about 6.5pc economic growth in 2018, policy adviser says

Proposal expected to be endorsed by top leaders at Central Economic Work Conference later this month

PUBLISHED : Tuesday, 12 December, 2017, 3:28pm
UPDATED : Tuesday, 12 December, 2017, 3:28pm

China is likely to set its 2018 economic growth target at about 6.5 per cent, unchanged from the previous year, leaving more room for quality growth as a government deleveraging campaign is set to intensify, a policy adviser was quoted as saying on Tuesday.

Lou Feng, a researcher at the Chinese Academy of Social Sciences, a state think tank, said he expected China to rely more on “innate drivers” for economic growth in 2018, such as technology innovation, adding that the country was now minimising the importance of quantitative targets, according to Chinese newspaper 21st Century Business Herald.

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Beijing routinely sets an annual growth target which is widely watched by the market for clues on how much the government is likely to stimulate the economy throughout the year.

The proposed target will be endorsed by top leaders at the closed-door Central Economic Work Conference later this month, and then announced at China’s annual congress early next year.

China lowered its 2017 growth target to about 6.5 per cent from the previous year’s 6.5 to 7 per cent, but its debt-fuelled investment binge has driven up infrastructure investment and real estate development, which has given the economy a surprise boost.

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The Chinese economy is on course to achieve 6.8 per cent growth this year, Lou was quoted as saying.

The government would seek to reduce overall leverage in the economy, pressing for a lower broad money supply against its gross domestic product in the next step of a deleveraging campaign, he said.

Many analysts said efforts to cut high debt levels received a renewed push after the agenda-setting Communist Party congress concluded in October.

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Policy sources said China’s leaders were likely to maintain this year’s growth target of about 6.5 per cent in 2018, even as they ratchet up efforts to prevent a destabilising build-up of debt.