China to Improve Policies for Steady Growth in 2016

To promote economic growth, China should pay more attention to growth quality and efficiency, as well as to structural reforms on the supply side, the statement said.

China’s leadership has mapped out an economic blueprint for next year that focuses on reducing industrial overcapacity, slashing costs for businesses, cutting unsold property inventory and fending off financial risks, a senior Chinese official has said.

The government aims to keep economic growth within a “reasonable range” next year, state radio said without giving specifics.

The government will take steps to expand aggregate demand while pushing forward “supply-side reform” next year, Reuters reported, citing an insider.

The National Development and Reform Commission’s (NDRC) think-tank recommended that China’s government continues to cut interest rates and banks’ reserve requirement ratio to bolster flagging growth in the world’s second largest economy.

China should also give way to pressure on yuan depreciation, the think tank said, in order to boost exports. Outdated restrictions on home ownership will be removed, according to the report.

“Fulfilling major economic targets of 2015 will mark the smooth completion of the 12th five-year plan (2011-2015) and allow the country to develop on a higher platform”, the statement said, adding that the economy maintained medium-high growth in 2015, economic structure optimized and people’s livelihood improved.

The annual conference, which reviews past year’s economic performance and sets targets for next year, closed on Monday.

“Because we realise that will be an “L-shape”, you can not only use demand-side policy to drive the economy”, the source said.

The government will expand its budget deficit next year and cut tax to help reduce burdens on companies, said the source.

Premier Li Keqiang recently pledged to step up “supply-side” reforms to generate new growth engines in the economy while tackling factory overcapacity and so-called zombie firms.

“Expanding the fiscal deficit ratio is the best choice available”, said Yao Wei, a Paris-based China economist at Societe Generale SA.

In early November, China’s President Xi Jinping signaled an end to the country’s annual 7-percent growth benchmark, announcing a 6.5-percent benchmark until 2020.