China will strive to keep economic growth on track next year by maintaining a prudent monetary stance with a balance between loosening and tightening, Bloomberg News reported, citing a statement from a key economic meeting that ended Thursday.
While China faces challenges to arrest a slowdown, growth is showing resilience and potential, giving the government plenty of room to maneuver, the official Xinhua News Agency said in a summary of the policy-setting Central Economic Work Conference. As in past years, no specific growth targets were announced for next year.
The Xinhua statement emphasized that China’s economy is adjusting to a “new normal” of slower growth – a phrase President Xi Jinping has used several times recently that reflects the leadership’s push to wean the economy from its dependence on infrastructure investment and exports.
The government cut interest rates in November as China heads for its slowest annual expansion since 1990.
China will keep consistency and stability in macroeconomic policy and stick to a proactive fiscal stance, Xinhua reported. China has said since 2008 that it’s implementing a “proactive” fiscal policy and started saying in 2010 that it’s following a “prudent” monetary policy, Bloomberg noted.
The country’s monetary policy will pay more attention to an appropriate balance between tightening and loosening, the Xinhua report said.
Hu Yifan, chief economist at Haitong International Securities Group in Hong Kong, said the language sends out an easing signal.
Hu said China has never decribed its money policy as “loose”, although the central bank has been injecting liquidity into the financial system to maintain stability.
“This sentence is basically saying that ‘we’ll try the best we can, do whatever we can, to maintain the financial system’s stability,’” she said.
At the meeting, Xi and Premier Li Keqiang stressed that the economy still faces many challenges and “relatively big” downward pressures such as increasing difficulties for businesses and the emergence of economic risks, Xinhua reported.
Although the risks are generally within control, it will take a while for China to gradually dissolve them, the statement said.
However, the leaders said China can deliver its social and economic goals for 2014 “relatively well”, with the economy staying within a reasonable range.
In March, the government set an annual economic growth target of about 7.5 percent for this year.
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