China can control risks,
hit 2017 growth target: premier
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[June 28, 2017]
By Kevin Yao and Tony Munroe
DALIAN, China (Reuters) - China is capable
of achieving its full-year growth target and controlling systemic risks
despite challenges, Premier Li Keqiang said on Tuesday, adding that
maintaining medium to high-speed long-term growth will not be easy.
Beijing targets economic growth of around 6.5 percent in 2017, compared
with the 6.7 percent pace delivered in 2016 - the slowest in 26 years.
In a speech at the World Economic Forum (WEF) in the northeastern city
of Dalian, Li said the Chinese economy remains steady in the second
quarter, as domestic demand has become a key pillar for the world's
"China's economy in the second-quarter maintained the first-quarter's
steady and improving momentum. We are fully capable of achieving the
main economic targets for the full year," Li said.
"Currently, China also faces many difficulties and challenges, but we
are fully prepared," he said.
China's economy, which grew a robust 6.9 percent in the first quarter,
generally remained on solid footing in May, but tighter monetary policy,
a cooling housing market and slowing investment reinforced views that it
will gradually lose momentum in coming months.
Beijing has been taking steps to identify and resolve financial risks,
which remain generally under control, Li said.
Among those risks is high levels of debt, which recently prompted
Moody's to cut its sovereign credit rating on China. Li said that the
capital adequacy ratios and provisions for bad loans at Chinese banks
were at relatively high levels.
"There are indeed some risks in the financial sector, but we are able to
uphold the bottom line of no systemic risks," he said.
"We are fully capable of preventing various risks and making sure
economic operations will be within a reasonable range."
Li also said Beijing will facilitate foreign investment by relaxing
restrictions on how much overseas firms can own of China ventures and
making it easier for them to register new companies locally.
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People walk past a logo at the World Economic Forum in Dalian,
Liaoning province, China, June 27, 2017. CNS/Yu Haiyang via REUTERS
China will give foreign investors greater market access to services and
industrial sectors as well as treat foreign and domestic firms equally, the
premier said - pledges that the government has made before.
He added that China will encourage foreign firms to reinvest their profits in
the country but will not restrict the cross-border movement of their earnings.
China is trying to bolster consumer-driven growth while curbing excess and
outdated capacity in industries such as steel and coal, cuts that Li said will
Li stressed the importance of job creation, and noted that while new
technologies such as artificial intelligence and robotics could cause job
losses, those are offset by growth sectors such as e-commerce, mobile payments
Employment has remained stable, Li said, with the survey-based jobless rate at
around 4.9 percent in May – the lowest in many years.
China wants to maintain medium- to high-speed economic growth over the long
term, as "no development is the biggest risk for China", Li said, noting that
the economy's sheer size made it harder to rack up high growth rates.
"It will not be easy for China to sustain a medium- to high-speed growth rate
over the long term," he said.
Global markets continue to fret about the outlook for China as policymakers have
tightened financial conditions and cracked down on wanton growth in debt to
defuse bubble risks.
Authorities have also taken steps to stabilize the yuan currency and reassure
investors that Beijing remains committed to reforms of the capital markets, even
as it puts up curbs to stem the outflow of funds.
(Reporting by Kevin Yao and Tony Munroe; Writing by Yawen Chen; Editing by Shri
Navaratnam and Richard Borsuk)
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