Growth target on track despite war on pollution
Print Edition
CHINA’S economy is on track to meet its official growth target for 2017, the head of the state planning agency said at the weekend, despite a punishing war on pollution which is expected to slash industrial output over the winter months.
China has ordered 28 cities in smog-prone northern regions to reduce emissions of hazardous PM2.5 airborne particles by at least 15 percent from this month to March, with some cities expected to cut steel production by as much as 50 percent.
But officials with the National Development and Reform Commission said the world’s second-largest economy would be remaining on track.
“The growth target of around 6.5 percent is expected to be fulfilled successfully, and it’s possible to achieve even better results,” He Lifeng, the commission’s chairman, told reporters on the sidelines of the 19th National Congress of the Communist Party of China in Beijing.
The country’s gross domestic product value will exceed 80 trillion yuan (US$12.1 trillion) this year, he said.
Although the global economy has been struggling to recover since 2012, China has kept economic indicators such as GDP, inflation and employment relatively stable, with more than 10 million people lifted out of poverty every year, He said. Meanwhile, progress has been made in advancing institutional reform, cutting excessive industrial capacity and pushing for economic upgrading, he said.
Most economists believe China’s actual growth should easily beat this year’s target.
The economy grew 6.8 percent in the third quarter, and 6.9 percent in the first half. Last year’s growth rate of 6.7 percent was a 26-year low.
China’s economy has surprised global markets and investors with robust growth so far this year, driven by a renaissance in its long-ailing “smokestack” industries such as steel and stronger demand from Europe and the United States.
But economists with Societe Generale said in a recent note that output cuts could slash industrial production growth by 0.6-0.8 percentage points and GDP growth by 0.2-0.25 percentage points in the next six months.
However, Zhang Yong, vice chairman of the commission, told reporters that the direct impact was likely to be limited.
“Measures to fight pollution don’t have a big impact on economic growth,” he said. “Measures to treat pollution have a positive impact on economic development in the long term.”
The government has been pushing a restructuring program designed to “upgrade” its heavy industrial economy, cut pollution and tackle profit-sapping capacity gluts in sectors like steel and coal.
China says it has cut annual crude steel capacity by as much as 110 million tons over the past five years, with coal capacity slashed by as much as 400 million tons.
Ning Jizhe, vice head of the commission and also head of the National Bureau of Statistics, said the country would continue to crack down on steel overcapacity, prevent obsolete plants from restarting and promote more mergers in the sector.
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