China’s new growth target for the next five years may be too ambitious to support structural changes.
It’s better to maintain stable growth than chase a certain target given structural issues facing its gigantic economy, the Hong Kong Economic Journal reports, citing Wang Tao, chief China economist of UBS A.G.
China is aiming for 6.5 percent gross domestic product growth under its 13th Five-Year Plan to 2020.
Wang said property construction is likely to remain stagnant in 2016 after a 10 percent fall in housing starts this year.
Meanwhile, growth in infrastructure investment could slow to about 15 to 18 percent in 2016 from 18 to 20 percent this year.
Wang said the renminbi remains overvalued and expects it weaken to 6.80 against the US dollar in 2016.
Nonetheless, a weaker yuan is unlikely to significantly boost exports amid competitive devaluations by other countries, he said.
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