China has set a range for its economic growth target for the first time in two decades.
It said the economy would expand 6.5-7 percent this year, more slowly than last year’s goal of about 7 percent, Bloomberg reported.
While downward pressure on the economy is “relatively big” in the first quarter, China can meet the goal, Xu Shaoshi, chairman of the National Development and Reform Commission, the country’s top economic planning agency, said Wednesday at a briefing in Beijing.
The country also plans to take steps to curb excess industrial capacity and deal with unprofitable “zombie companies”, he said.
The announcement is the first time top leaders said they would aim for a growth range instead of a specific target since the country’s eighth Five-Year Plan, which ended in 1995.
In that plan, China targeted an 8-9 percent expansion.
The new target also comes a month earlier than in past years, giving some additional assurance to global investors.
“It’s impractical to have a growth target being a number,” Iris Pang, an economist at Natixis SA in Hong Kong who forecasts 6.6 percent growth this year, was quoted as saying.
“A range is more practical. It gives more room for policymakers to exercise their creativity to boost the economy.”
The central bank plans to loosen rules on when foreign investors can bring money in and out of the country, Bloomberg said, citing unnamed sources.
The change would apply to funds under the Qualified Foreign Institutional Investor program, which grants quotas for money brought into China for investment in domestic stocks and bonds, the report said.
China still has many policy tools to deploy, and the central bank’s recent cut to the minimum down payments required for first-time homebuyers will help reduce excess housing stock, Xu said.
The People’s Bank of China said Tuesday it cut the minimum to 20 percent, the lowest ever, as it steps up support for the property market.
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