The Financial Express

China likely to keep 2018 GDP target around 6.5pc

| Updated: January 05, 2018 14:28:33

File Photo (Reuters) File Photo (Reuters)

China will keep its target for economic growth at “around 6.5 percent” in 2018, unchanged from last year, policy sources told Reuters.

The second largest economic country of the world seeks to balance efforts to reduce debt risks while keeping the economy stable.

The proposed target, to be unveiled at the annual parliament meeting in March, was endorsed by top leaders at the closed-door Central Economic Work Conference in Dec. 18-20, sources said.

Where Beijing’s policymakers set the speedometer on their closely-managed economy is always of crucial interest to global investors because of China’s role as an engine of growth for the world.

Past stimulus policies to stop growth flagging as the global economy passed through a sticky few years resulted in massive borrowing by state-run firms and local governments.

Total debt in the second quarter of last year amounted to 255.9 per cent of Gross Domestic Product, according to Bank for International Settlements estimates.

And policymakers are on a mission to reduce the risk of any crisis erupting out of the mountain of debt as the country makes its gradual transition from a command to a market economy.

Analysts expect final numbers will show the economy grew around 6.8 per cent in 2017, beating the target thanks to strong global demand for Chinese exports, and just bettering the 26-year low of 6.7 percent posted in 2016.

To hit the 2020 goal, the economy needs to expand at least 6.3 annually over the next three years, officials have said.

The government will maintain a 3.0 per cent inflation target for 2018, the sources said, suggesting policymakers are not foreseeing any sharp price rises, as factories struggle to pass on higher costs to consumers.

November consumer inflation slowed to 1.7 per cent, while producer price rises eased to a four-month low of 5.8 per cent.

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