BEIJING, Oct 11: China’s economic growth should exceed 7.5 percent this year, deputy central bank governor Yi Gang was quoted by Xinhua as saying, the latest expression of confidence from Beijing that the world’s No. 2 economy is steadying.
Yi was quoted as saying on the sidelines of the International Monetary Fund meeting that growth could hit 7.6 percent, and that the government had the nation’s shadow banking system and its debt problems under control.
‘I think for this year we’re going to have certainly above 7.5 percent growth rate,’ Yi was reported by Xinhua to have said in Washington. ‘Maybe 7.6 percent (or) something like that.’
After cooling in 12 of the past 14 quarters, China’s economy is finally showing signs of stabilisation, helped in part by government measures to shore up growth, including lowering taxes for small firms and quickening infrastructure spending.
Growth in exports, which had slumped last year, is also picking up on a firmer U.S. Economy.
China is set to releases its third-quarter gross domestic product data on Oct. 18 and analysts expect growth to quicken to 7.8 percent from a year ago.
Yi did not elaborate on how the government is controlling dangers in China’s shadow banks and its government debt — two areas of the financial sector widely regarded to be among the biggest threats to the Chinese economy.
Analysts worry that lightly-regulated shadow banks, estimated to be worth 34 trillion yuan ($5.6 trillion) and accounting for a third of outstanding credit, may inflate asset bubbles and worsen bad debt problems with their lax lending standards.
Some 9.7 trillion yuan of debt incurred by local Chinese governments have also raised investor concerns that they could burden banks with a wave of dud loans.
The state auditor is currently auditing local government finances across China for the second time since 2010, and is set to release its findings before the year-end, including a keenly-awaited figure for the size of total outstanding public debt.
Economists including those from Standard Chartered have warned that the latest audit could show total government debt doubling from the 10.7 trillion yuan found in 2010. ($1 = 6.1158 Chinese yuan)
(AGENCIES)
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