He Lifeng | Chief economic planner says growth target can be met

He Lifeng, chairman of the National Development and Reform Commission

China’s top economic planner expressed confidence yesterday that stronger consumer spending will help the country meet a 6.5 percent growth target that is little changed from last year despite efforts to promote more sustainable, energy-efficient activity.

Efforts to promote domestic consumption and reduce reliance on trade and investment are making progress, and consumption could account for more than 60 percent of growth this year, He Lifeng, chairman of the National Development and Reform Commission, said at a news conference. That would be up from last year’s 58.8 percent.

The 6.5 percent growth target announced Monday would be among the world’s highest if achieved.

“It is in line with expectations and objectively can be realized through hard work,” He said at the news conference, held during the meeting of China’s ceremonial legislature.

Private sector analysts say the decision to set a target again this year indicates Chinese leaders still are concerned with the total growth figure despite saying they want to switch to other indicators such as job creation and income growth. Some suggested hitting this year’s target might require Beijing to pump up activity by easing bank lending, which would set back reform efforts.

The world’s second-largest economy grew 6.9 percent last year — above the official target of “6.5 percent or higher” — but that was due partly to a boom in lending and real estate sales that regulators are trying to cool due to fears of rising debt.

“The government still set a growth target for 2018 despite the rhetoric about moving away from the speed of growth to quality of growth,” UBS economists said in a report.

They noted that the official target for growth of retail sales is 10 percent, or a faster pace than the overall economy, while Beijing refrained from setting a goal for investment.

“Not setting a national target may be another sign that the central government is de-emphasizing on growth,” said the UBS economists.