China trims 2017 growth target, warns against trade controls
By Joe McDonald, AP Sunday, March 5, 2017, 1:08 pm TWN
BEIJING (AP) — China's top economic official trimmed its growth target and warned Sunday of dangers from global pressure for trade controls, as Beijing tries to build a consumer-driven economy and reduce reliance on exports and investment.
In a speech to the national legislature, Premier Li Keqiang Li promised more steps to cut surplus steel production that is straining trade relations with Washington and Europe. He pledged equal treatment for foreign companies, apparently responding to complaints Beijing is trying to squeeze them out of technology and other promising markets.
Li's report set the growth target for the world's second-largest economy at "around 6.5 percent or higher, if possible." That's down from 6.7 percent expansion last year but, if achieved, would be among the strongest globally, reflecting confidence that efforts to create new industries are gaining traction.
Li called for attention to the risks of China's surging debt levels, which economists see as a rising threat to growth. He announced no major initiatives, but that was widely expected as the ruling Communist Party tries to avoid shocks ahead of a congress late this year at which President Xi Jinping is due to be given a second five-year term as leader. Analysts expect Chinese leaders to use the legislative meeting to emphasize reducing financial risks and keeping growth stable.
At a time of demands in the United States and Europe for trade controls, Li warned China faces "more complicated and graver situations" at home and abroad.
"Both the de-globalization trend and protectionism are growing," Li said. "There are many uncertainties about the direction of the major economies' policies and their spillover effects, and the factors that could cause instability and uncertainty are visibly increasing."
Chinese leaders have publicly defended free trade in response to President Donald Trump's promises to raise duties on Chinese goods, though Beijing's trading partners complain China is the most closed major economy.
China "may be adversely affected" if Trump goes ahead with "tough policies," but the impact should be limited, said economist Song Lifang at Renmin University in Beijing. "With China's domestic economy still in the phase of transformation, the tasks for China's economic growth are arduous but with great potential."
Growth has cooled steadily since 2010 as communist leaders try to develop a consumer-driven economy and reduce reliance on trade, heavy industry and investment.
The latest growth target is in line with those reforms and efforts to create a "moderately prosperous society," Li said.
Chinese leaders have tried to downplay the significance of the growth target and shift focus to improvements in incomes, consumer spending and other factors. But the target is closely watched as a forecast of economic performance, which has repercussions throughout Asia, where China is the biggest trading partner for all its neighbors.
Li acknowledged concerns about the rising dangers of debt, though he said the financial system is stable.
"We must be fully alert to the buildup of risks related to non-performing assets, bond defaults, shadow banking and Internet finance," said Li.
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