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Seeking high-quality development amid controlling risks


Source: Global Times    Published: 2018-3-5

China has set its GDP growth target at around 6.5 percent for 2018, the same target it set in 2017, according to a government work report released on Monday at the ongoing annual two sessions.

A GDP growth of around 6.5 percent will support employment rates, according to the annual government work report that Chinese Premier Li Keqiang delivered to the first session of the 13th National People`s Congress, China`s top legislature, on Monday.

This year`s development targets also predict a consumer price index (CPI) increase of around 3 percent and the creation of more than 11 million new jobs.

For the first time, the government work report this year includes the surveyed urban unemployment rate as a target to reflect employment in a more comprehensive way.

The surveyed urban unemployment rate, which covers both local and migrant workers, is projected to remain within 5.5 percent, while the registered urban unemployment rate, covering only workers with local hukou household registration, is expected to be 4.5 percent, the report showed.

"Inclusion of the unemployment rate is a must and right thing, indicating in a real sense that our economy is paying more attention to the domestic demand and residents` disposable income while seeking new driving forces," said Wan Zhe, chief economist of the International Cooperation Center of the National Development and Reform Commission.

The targets are designed to ensure a decisive victory in building a moderately prosperous society in all respects, in line with the fact that China`s economy is transitioning from a phase of rapid growth to one of high-quality development, Li noted.

The growth rate target of around 6.5 percent is not unexpected, which suits both the reality and China`s expectations and requirements for economic growth, said Wan.

"The country`s economic development trend is still on the horizontal line of the L-shape pattern, indicating the rapid-pace growth has slowed and the economy has entered a moderate growth track," Wan noted.

"The most important thing is to maintain an orderly and steady pace while seeking progress, leaving room for reform," she added.

Lian Ping, an economist at the Bank of Communications, told the Global Times on Monday that there is a high probability this year`s GDP target will be realized. The Bank of Communications` forecast for GDP growth is 6.7 percent, which is based on a good external environment including relatively rapid increases in exports and consumption.

In 2017, all the main targets and tasks for economic and social development were accomplished and performance has beat expectations. GDP grew by 6.9 percent and personal income rose 7.3 percent. Around 13.51 million new urban jobs were created, and the unemployment rate was the lowest in recent years, according to the report.

The report pointed out that supply-side structural reform is set to make real achievements with the macro leverage ratio remaining steady and various risks being effectively managed.

In the financial sector, Li said the internal risk control of financial organizations needs to be strengthened. Meanwhile, regulatory rules on shadow banking, internet finance and financial holding companies will be improved.

"The work report has specifically targeted an in-place regulation in these three aspects since other related risks including banks` non-performing loans and local government debt are overall controllable," Lian said, noting that regulation and even legislation will be further promoted this year.

Premier Li reiterated that China will keep its neutral and prudent monetary policy and will maintain reasonably steady liquidity. He also noted reasonable growth in the broad M2 money supply and total social financing this year.

Reasonable growth of the money supply requires the real economy`s steady growth, coordination of risk prevention, deleveraging and strict regulation, according to a note by the Financial Research Center under the Bank of Communications on Monday.

Wan Zhe is a visiting fellow of Chongyang Institute for Financial Studies, Renmin University of China.

Key Words:China   economy   two sessions   Wan Zhe  

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