China’s economy is likely to grow around 7 percent this year and 6.9 percent in 2016 as the government pushes reforms on interest rates and the currency and pursues slower but higher-quality growth, the OECD said on Friday.
China can avoid an abrupt slowdown as long as the government ensures an orderly unwinding of economic imbalances, the Organisation for Economic Co-operation and Development said in its latest survey on the world’s second-largest economy.
OECD Secretary-general Angel Gurria said he also expected domestic demand will be strong enough to prevent deflation.
“I think 7 percent (economic growth) is more sustainable, 7 percent avoids bubbles and 7 percent is attainable,” he told Reuters in an interview.
Beijing has been trying to reduce excess factory capacity, local government debt and risks from a cooling property market, which are likely to drag growth to a quarter-century low of around 7 percent this year from 7.4 percent in 2014.
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