The Chinese government has reached all the key targets including for GDP growth and capacity reduction in steel and coal, South China Morning Post reported on Dec 13.

Data shows that China’s 6.7 percent growth rate in the first three quarters guarantees an annual growth target of 6.5 percent.

Meanwhile, traditional growth engines -industrial production, investment and exportation- have returned to normal levels after suffering deflations in commodity prices for over four years.

The revival of traditional industries relies largely on the capacity cutting efforts by the government. According to an official from NDRC, China has achieved its capacity cut targets ahead of schedule, with 45 million tons of steel and 250 million tons of coal being reduced.

The value-added tax reform has also boosted economic performance by reducing tax burdens on businesses and individuals. The total amount in tax reductions will surpass 500 billion yuan in 2016.

Despite all the good signs, China still faces great challenges in 2017. For example, investors may withdraw from the Chinese market as the yuan weakens, real estate bubbles continue to expand, and capital outflow pressures increase due to expected interest hikes by the Federal Reserve.

Amid that background, China’s top leaders will create 2017’s economic policies at the Central Economic Work Conference with an eye to tackling these new challenges.