China Announces 6.5% Growth Target for 2018

Chinese leaders set a robust annual economic growth target Monday at a legislative session overshadowed by proposed constitutional changes that would allow President Xi Jinping to stay in power indefinitely.

The target of “around 6.5 percent,” announced in a report by Premier Li Keqiang to the ceremonial National People’s Congress, is down slightly from 2017 but would be among the world’s strongest if achieved.

Private sector analysts have questioned whether the ruling Communist Party can reach that without relying on stimulus from bank lending and government spending, which would set back efforts to nurture self-sustaining, market-oriented growth based on domestic consumption instead of exports and investment.

“GDP growth of around 6.5 percent will allow us to achieve relatively full employment,” said Li’s report.

Last year’s growth target was “6.5 percent or higher.” Real growth came in at 6.9 percent but that was supported by a boom in bank lending and real estate sales that regulators are trying to rein in amid concerns about surging debt.

Li’s report also promised to push ahead with an overhaul of state industry including the restructuring or bankruptcy of “zombie enterprises,” or money-losing companies that are kept afloat by loans from government banks.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza