China should set the growth target for next year around 6.5% as downward pressure on the Chinese economy is still relatively high, the State Information Center, a government think tank, said.
However, there are high chances that growth may rise above 6.5% as reforms deepen, the SIC said in an article published in the China Securities Journal Monday.
As for the consumer price index, the SIC recommends growth around 2.5% although next year, CPI is likely to expand just 1.8% since supply continues to exceed demand and there is no basis for prices to rise sharply.
Meanwhile, the producer price index is likely to grow around 1.0% next year as the forces driving commodities prices are not strong enough, the think tank said.
The SIC’s suggestions come ahead of the annual Central Economic Work Conference involving top Chinese leaders, which is expected to take place this week and which will set the national agenda for the economy in 2017.
Exports are expected to fall about 3% next year, and imports around 4%, with both narrowing from 2016 levels, the SIC said. Fixed asset investment is expected to grow about 8.5%, and retail sales will likely rise about 10%, according to SIC.
In order to achieve its economic growth target, China should adopt a more proactive fiscal policy, raising the deficit ratio to GDP and increase treasury bond sales, SIC said.
via MNI News