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China likely to set slower GDP growth target for 2018

Published: January 16, 2018 14:48:38 | Updated: January 17, 2018 14:24:43


China is likely set its 2018 economic growth target at around 6.5 per cent as a government-led crackdown on debt risks and factory pollution drag on overall activity, a Reuters poll showed.

The poll showed on Tuesday that China is likely unchanged their economic growth target from the previous year.

Beijing is in the second year of a relentless campaign to wean China off its debt-heavy investment model, clamping down on everything from speculative property lending to shadow-bank financing activities as policy makers look to foster sustainable longer term growth.

That has pushed up borrowing costs and taken some of the momentum off the economy with growth forecast at 6.5 per cent this year, according to economists from 70 institutions surveyed by Reuters.

It was slightly above the poll’s October forecast of 6.4 per cent expansion, but would still lag the survey’s 2017 projection of a 6.8 per cent gross domestic product increase.

Zhang Yiping, an analyst with China Merchant Securities, said the economy may “fare below expectations” due to tighter financial scrutiny.

China will announce fourth quarter and 2017 GDP growth on Thursday.

Analysts expect the People’s Bank of China to keep its benchmark lending rate unchanged at 4.35 per cent through at least the second quarter of 2019, the poll showed.

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