China, the world’s second-largest economy, may set a slower economic growth target for 2017, showing its dedication to improve the efficiency of economy rather than focusing on a pure boost in the growth rate.
The market widely expected the country to set its gross domestic product growth rate this year at a pace slightly slower than last year’s 6.7%, with an average forecast at 6.6%, based on data collected by Sino-US.com.
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China is expected to announce its 2017 GDP target on Sunday, when the National People’s Congress, the country’s parliament, kicks off its annual session.
President Xi Jinping has said repeatedly since he took office that China needs to improve the quality and effectiveness of its economic growth rather than focusing on the growth speed.
The overall characteristic of China’s economic trend is slowing but stabilizing, while maintaining a better momentum, according to a recent central economic working meeting held late last year, which said the economic growth should stay in a reasonable range with improving quality and effectiveness.
China’s GDP growth was 7.3, 6.9, and 6.7 percent in 2014, 2015 and 2016 respectively, according to data from the statistics bureau.
Central bank advisor Huang Yiping told Xinhua News Agency last week that the government should set a more flexible target for economic growth in 2017 to make more room for reforms, proposing a target range of 6-7 percent.
Although China’s economic growth slowed to 6.7 percent in 2016, registering a 26-year low, it is indisputable that the economy has ended the previous year on an upbeat note with growth in the fourth quarter boosted by spending and property market recovery.
“Investment growth has been accelerating, and will likely stay robust beyond the next few quarters; consumer demand will likely stay robust, and export growth may pick up further,” said China International Capital Corporation Ltd. (CICC), one of China’s leading investment banks, in its report released late February, which forecasts a GDP growth of 6.8% this year.
The 6.8 percent forecast is higher than the growth rate anticipated by Chinese think tanks. The forecasting department at State Information Center (SIC), a state-run think tank, expects China’s economic growth could slow to 6.5 percent in 2017, citing a broader slowing trend despite a booming new technology sector, the Shanghai Securities News reported in January.
The forecast accords with that of Chinese Academy of Social Sciences (CASS), another government-backed research organization, which predicted the GDP growth to scale at around 6.5 percent, while the Consumer Price Index (CPI) to gain a 2.2 percent’s growth in 2017.
Meanwhile, a high-level seminar held by Xinhua News Agency and Xiamen University on China’s macroeconomics released a quarterly forecast report, China’s Quarterly Macroeconomic Model on February 22, predicting the economy would continue to slow down with the GDP growth in 2017 to reach 6.64 percent.
Over the past several years, China’s government is widely reported to be transforming the economy from investment and exports-driven to an economic structure focusing more on innovation and consumption. China’s economic quality has improved over the past four years, thanks to the restructuring efforts, despite the slowdown, said Xinhua.