China cuts GDP growth target as it pushes through reforms, de-leveraging
China has cut its growth target this year as the world's second-largest economy pushes through painful reforms to address a build-up in debt and strives to keep a lid on risks in its financial sector.
China aims to expand its economy by around 6.5 percent in 2017, Premier Li Keqiang said in remarks prepared for delivery at the opening of the annual meeting of parliament on Sunday.
China targeted growth of 6.5 to 7 percent last year.
A lending binge and increased government spending have fueled worries among China's top leaders about high debt levels and an overheating housing market.
The 2017 target for broad money supply growth was cut to around 12 percent from about 13 percent set for 2016, while the government's budget deficit target was kept unchanged at 3 percent of gross domestic product.
China will continue to implement a proactive fiscal policy and maintain a prudent monetary policy, Li said, adding that government will press on with supply-side reforms and take steps to control risks and ensure safety in the financial sector.
"In general, China's policy stance has turned to 'risk control' and 'bubble deflating'.
This means that the monetary policy will gradually tighten," said Zhou Hao, emerging markets economist at Commerzbank AG in Singapore.
The target for consumer price inflation this year was kept unchanged at 3 percent.
VIGILANCE AGAINST RISKS
China should have higher levels of vigilance against risks from non-performing assets, debt defaults, shadow banking and internet finance, Li said.
It will steadily push forward with de-leveraging this year, mainly in the non-financial corporate sector, he said.
China will also press on with asset securitization and debt-to-equity swaps this year.
China will continue to implement a city-based policy to reduce real estate inventories, mainly in the third and fourth-tier cities, Li said.
Gross domestic product grew 6.7 percent in 2016, the slowest in 26 years.