20 March 2016 07:27 pm
China’s economy still faces downward pressure but recent data points to some improvement in activity, Vice Premier Zhang Gaoli said yesterday. Chinese leaders have repeatedly tried to reassure jittery financial markets and China’s major trading partners that Beijing is able to manage the slowing economy, following a slide in the country’s stock market and depreciation of the yuan.
“We don’t want to shy away from saying that China’s economy is facing downward pressure, but overall the progress is steady,” he said. Recent data, until early March, including fixed-asset inves tment and employment, showed that the economy is imp r o v ing, Zhang t o l d a h i g h - l e v e l e c o n o m i c forum in Beijing. China’s manufact u r ing output in January and February grew at its weakest pace since 2008, according to data released by the National Bureau of Statistics earlier this month. The government will make preemptive policy adjustments to help keep economic growth within a reasonable range, Zhang said, reaffirming the official stance.
The government also needed to prevent risks in the stock, debt, currency and property markets, prevent “cross infection” between the markets and ward off systemic risks in the economy, Zhang said. China will press ahead with “supplyside reforms” to cut excess industrial overcapacity, focusing on such sectors as coal, steel, aluminum and plate glass, he added. The government has set a growth target of 6.5 percent to 7 percent for 2016.
The world’s second-largest economy expanded by 6.9 percent in 2015, its slowest pace in 25 years. Beijing has pledged to make monetary policy more flexible this year even as it leans more on increased fiscal spending and tax cuts to support economic growth and cushion the pain from structural reforms.
Finance Minister Lou Jiwei told the same forum that he saw little market impact caused by Moody’s recent downgrade of its outlook on China’s government debt. On March 2, Moody’s Investors Service lowered its outlook on Chinese government debt to “negative” from “stable”, citing uncertainty over authorities’ capacity to implement economic reforms, rising government debt and falling reserves. “I don’t care too much about its ratings,” he said, adding that the government will be able to deal with the problems cited by the ratings agency. REUTERS