China to deepen reform To keep growth steady in 2018

Beijing : China will deepen structural reforms and curb risks to the country’s financial system while maintaining steady economic growth in 2018, the official Xinhua news agency said yesterday, citing leaders at an economic planning meeting.

China has seen better-than-expected economic growth this year even as it stepped up a campaign to cut debt, though there are growing concerns that the tighter policy environment could weigh on growth in the world’s second-largest economy next year.

The annual economic conference is attended by China’s top leaders and is keenly watched by investors for clues to policy priorities and economic targets in the year ahead.

The government will push forward with structural supply-side reform and maintain prudent, neutral monetary policy next year as it looks to improve the quality of growth, the news agency said citing a statement following the meeting.

“China’s economic development has entered a new era. The basic feature is that our economy has shifted from the high-speed growth stage to a stage of high-quality development,” the statement said.

“Pushing forward high-quality growth is a requirement for maintaining healthy development of the economy.”

The statement echoes President Xi Jinping’s comment at a key party congress in October that China would strive for higher quality, more efficient and fair growth.

At a Politburo meeting earlier this month, top leaders pledged to deepen structural reforms and curb systemic risks from the country’s growing debt pile while maintaining steady economic growth in 2018.

In the first nine months of this year, the economy grew 6.9 percent from a year earlier. Growth was underpinned by stronger exports and sustained state spending, positioning China to exceed the government’s growth target of around 6.5 percent this year.

China will maintain economic growth in a reasonable range next year and also keep credit growth reasonable, Xinhua said.

Sources have told that Chinese leaders are likely to stick with that growth target for 2018, even as they ratchet up efforts to prevent a destabilising build-up of debt.

Beijing has made progress this year controlling the level of debt in the economy as a portion of GDP, with corporate debt ratios declining slightly this year, according to data from the Bank of International Settlements.

While the statement following this year’s economic conference made no mention of the need to lower corporate leverage - in contrast to last year’s readout - that does not mean China is de-emphasising the deleveraging drive, said Yang Zhao, Nomura’s chief China economist.