The Chinese economy is not heading for a hard landing and the country is confident of achieving a reasonable growth rate, the top economic planner said on March 6.
“Predictions of a hard landing are destined to come to nothing. ... Rest assured, this possibility does not exist,” Xu Shaoshi, head of the National Development and Reform Commission, said at a news conference.
“We are confident and capable of keeping the economic growth rate within a reasonable range,” Xu said.
He also gave an assurance that China would continue to contribute to global growth, rather than “dragging down the world economy”.
The nation has set an economic growth target this year at between 6.5 and 7 percent. It is the first time in more than two decades that the government has set a range, rather than a specific rate, as a target.
Last year, the Chinese economy grew by 6.9 percent amid a fragile global recovery and domestic structural adjustments.
“The government has plenty of ammunition to resist downward pressure, and we are also constantly replenishing the policy toolbox,” Xu said, while acknowledging that tough challenges lie ahead, including uncertainty and instability in the global economy.
Stimulating consumption will continue to be the top priority, as consumption has expanded rapidly, Xu said. Last year, consumption far outweighed investment, contributing 66.4 percent to Chinese economic growth. Retail sales of consumer goods are expected to increase by about 11 percent this year, up from 10.7 percent last year.
The government will also boost effective investment. A reserve pool for key projects has been set up to guide investment in the next three years, Xu said.
Groups of projects can be approved, launched and completed in succession and this continuous process will help to maintain a beneficial cycle of investment, Xu said.
“Effective investment should meet the requirement of ‘killing three birds with one stone’,” Xu said, adding that the investment should help to strengthen points of weakness, accelerate structural reform and foster new growth engines.
Central government budgetary investment will be increased to 500 billion yuan ($76.7 billion) this year, up from 477.6 billion yuan last year, the commission said. The investment will focus on projects in affordable housing, railways, technology innovation, environmental protection, education and poverty relief.
Fixed-asset investment is expected to grow by 10.5 percent this year, up from 9.8 percent last year.
Xu said the Chinese economy should not be viewed from traditional perspectives.
“We should look at it from the angle that the economy has entered the ‘new normal’ period, in which growth rates have changed and the economy’s growth engines are changing,” Xu said.
Li Yining, a CPPCC member and a senior economist, said, “I hope those who are suspicious about China’s growth potential can do on-the-spot research in China.
“They should go to the Zhongguancun area in Beijing and talk to the young students, researchers and entrepreneurs there. That is the future of China. We are entering a new era of innovation,” Li said.
Yuan Yafei, chairman of Jiangsu-based Sanpower Group, said it is “absurd” to discuss a hard landing when the country is still enjoying one of the fastest economic growth rates in the world.
“China has a lot of resources to allocate if it needs to boost GDP. I am not worried about a slump in the economy because it will not happen,” Yuan said.
He added that entrepreneurs should adjust their strategies when growth slows.