Beijing lowers growth target to 6.5 per cent with eye on financial risks and economic restructuring
Premier tells NPC deputies China faces ‘risks and challenges, some foreseeable and others not’
Beijing has set a lower economic growth target for this year than the 6.9 per cent achieved last year as it keeps an eye on global trade uncertainties and long-term financial risks and seeks new drivers for the world’s second largest economy.
The growth target of “around 6.5 per cent” revealed in Premier Li Keqiang’s annual government work report on Monday morning did not surprise markets at home or abroad. But it gives the government more flexibility than last year’s target of “6.5 per cent and higher if possible”.
Analysts said the change was reasonable given the tough tasks faced by the government in tackling financial risks, luring back private investment, revitalising state firms and encouraging technical innovation.
Zhang Jun, chief economist at Morgan Stanley Huaxin Securities in Shanghai, said a lower growth target was a reflection of a range of economic uncertainties, including expectations of higher interest rates in the United States, the setting up of potential trade barriers by the Trump administration and domestic financial deleveraging.
“This year’s growth target is no problem to accomplish,” he said. “If there are any signs of approaching the government’s floor, there’s plenty of room for policy loosening.”
