China should loosen its monetary and fiscal policies in order to achieve 6.5 percent economic growth this year as challenges remain, according to some economists.
China’s economy may grow 6.4 percent this year, lower than Beijing’s target of 6.5 percent to 7 percent, the Hong Kong Economic Journal reports, citing Liu Ligang, chief economist for Greater China of Australia and New Zealand Banking Group Ltd.
He said the central bank should significantly boost market liquidity.
The government is expected to roll over 5.75 trillion yuan (US$870 billion) of local government this year, on top of 3.2 trillion yuan last year, Li said.
Hong Hao, chief strategist of Bank of Communications International, said China faces a lot of challenges in pursuing its growth target.
These include 5.1 billion square meters of excess property inventory.
He said the oversupply will drag on property investment.
Liao Qun, chief economist of CITIC Bank International, said China is right to aim for a growth range rather than a single target to avoid further weakness in the renminbi.
This is the first time economic growth is being pegged within a band in what is seen as an attempt to ensure flexibility and manage expectations.
The new goal was unveiled by Xu Shaoshi, chairman of the National Development and Reform Commission, at a press conference in Beijing on Wednesday.
Previous announcements were made during the plenary sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference in March each year.
State media deleted stories about the new growth target and the transcript of Xu’s comments on the State Council media was taken down.
Earlier, Xu told a press conference the government will cap the unemployment rate at 4.5 percent.
It will step up efforts to reduce excess capacity and cut the cost of investment, he said.
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