Business
21:11, 05-Mar-2018
Expert: GDP target of 6.5% a positive sign of change, but is not an easy task
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China has set a GDP target of 6.5 percent for 2018, set by the annual government work report announced on Monday. The target is the same as last year. Experts have said it is a positive sign of change in the growth model, but remains a difficult task.
“The government has realized that China in [its] current situation will not need a high growth rate, but needs the growth of quality,” explained Wang Jianhui, general manager of the R&D Department of Capital Securities.
Based on Wang’s point of view, the continuous cutting of overcapacity in steel, coal and electricity industries, as well as relatively less stimuli from fiscal and monetary sides will put pressure on the GDP target.
“Combining all these factors, I think we will have a little bit tougher task this year to achieve the 6.5 percent,” Wang told CGTN.
The government report also stressed that one of the top tasks for 2018 is to control financial risks. Chinese Premier Li Keqiang said that China will strengthen coordination of financial supervision and improve its monitoring of shadow banking, Internet finance and financial holding companies.
According to Wang, the current leverage rate in the financial sector is high, as “the ratio of credit to GDP is over 210 percent.” This explains why the government considers the control of financial risk as one of its top priorities.
“It’s also an industrial issue, because the e-commerce and e-financing used to develop very fast without regulation. But right now, we have something to remedy them,” Wang added.