China’s leaders approved an economic blueprint for next year that focuses on dealing with long-term problems that have been plaguing the world’s No. 2 economy, such as persistent industrial overcapacity and a property glut.
The plan, laid out at a closed-door meeting in Beijing of senior Communist Party officials led by President Xi Jinping, comes as the leaders weighed the likelihood that the economy’s sluggish growth could continue, The Wall Street Journal reported.
They discussed potential continued declines to growth rates, industrial output and employment followed by a long period of flat or stagnant growth, the newspaper said, citing an unnamed senior Chinese official with direct knowledge of the meeting.
“The economy will follow an L-shaped path, and it won’t be a V-shaped path going forward,” the official said.
Still, worries over a potential hard landing in China’s economy are “unwarranted”, the official said, pointing to monetary and fiscal levers Beijing can still pull to help spur growth.
The plan acknowledges chronic problems hindering China’s transformation into an economy driven more by consumption and less by debt and investment.
Beijing’s economic priorities for 2016 include reducing industrial overcapacity, slashing the country’s stockpile of unsold homes, lowering costs for businesses and mitigating financial risks, a communiqué released by the official Xinhua news agency said after the meeting ended Monday.
The plan was decided on at the annual year-end gathering of China’s top economic officials, called the Central Economic Work Conference.
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