China’s economy isn’t headed for a hard landing and isn’t dragging on the global economy, China’s top economic planner said Sunday.
Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing that uncertainty and instability in the global economy do, however, pose a risk to the country’s growth, Reuters reports.
On Saturday, as Beijing kicked off its 12-day annual national parliament session, China acknowledged it faced a tough battle to keep the world’s No. 2 economy growing by at least 6.5 percent over the next five years while pushing hard to create more jobs and restructuring state-owned enterprises.
However, Xu said Sunday, “China will absolutely not experience a hard landing. These predictions of a hard landing are destined to come to nothing.”
He did not refer by name to George Soros, who was widely reported recently to have made such a prediction.
China’s economy grew 6.9 percent in 2015, the slowest pace in a quarter of a century, but still comfortably the fastest rate among major economies.
It has set a target range of 6.5-7 percent for this year, introducing a band rather than a hard target as it seeks greater flexibility in juggling growth, job creation and restructuring of a host of “zombie companies” in bloated industries.
On Saturday, Premier Li Keqiang outlined a series of targets on issues such as energy consumption, job creation and inflation but few details on how they would be met.
Many investors had been hoping China would post an aggressive target for fiscal spending to prop up growth.
But the draft goal of running a fiscal deficit equivalent to 3 percent of gross domestic product, while up from the previous year’s target of 2.3 percent, disappointed some.
Xu emphasized that China will work to improve the “efficiency” of government investment, suggesting a desire for more targeted spending.
Central bank vice governor Yi Gang reiterated Sunday that Beijing will keep the renminbi basically stable and that there was no basis for continued depreciation.
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