With China fixing 6.5 to 7 per cent as its Gross domestic product (GDP) target for this year, the Communist giant’s top economic planner on Sunday ruled out a "hard landing" for the world’s second largest economy, but said that uncertainty and global instability do pose a risk to growth.
The Chinese economy is so resilient with relatively strong abilities to resist risks, Xu Shaoshi, who heads the National Development and Reform Commission, the main planning body of China said on the sidelines of the annual parliamentary session.
"We are capable of keeping economic growth at rates within a reasonable range," Xu said. "We are confident of achieving that end."
In his work report on Saturday Chinese Premier Li Keqiang set the target 6.5 per cent to seven per cent this year.
Last year, the economy slipped below seven per cent to 6.9 per cent, the lowest in 26 years casting doubts about whether China could revert to seven per cent in the near future due to continued slowdown of its main sectors of growth, coal, steel, manufacturing, structural adjustment and fragile global recovery.
Xu said China’s economic growth remains relatively fast among world major economies. The 6.9-per cent growth was hard won given the sluggish global recovery.
China accounted for a quarter of the world’s economic growth in 2014, Xu was quoted as saying by state-run Xinhua news agency.
But China must not underestimate risks this year, he said, due to slowly-recovering world economy, dipping prices in bulk commodities and geopolitical risks.
Domestic situation, including slowing growth, dropping prices of industrial goods, and declining corporate profits and fiscal revenue, has called for high alert, he said.
The government has a broad enough tool kit for the economy, and is doing research to prepare more policy measures, he said.
"There was a rumour that China’s stock and foreign exchange markets’ turbulence in January contributed to the chaos in the United States and Europe," he said.
"China is unable to produce such a spillover," Xu said.
From February 8 through 12, big drops were witnessed in US and European stock markets, as well as bulk commodities such as crude oil, but Chinese were celebrating Spring Festival while the financial markets were being closed, he said.
Unlike previous years when investment was a major contributor to growth, consumption accounted for 66.4 per cent and investment only 10 per cent, he said.
Services, rather than agriculture and industry, now account for more than half of the GDP, he said.