China’s economic planner expects difficulties ahead

China’s domestic economy is set to face increasing headwinds in 2016, and an uncertain global economic situation poses a risk to the country’s growth, Beijing’s top economic planner said on Sunday (March 6).

Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing that China was facing an ever more complicated array of internal challenges.

“At the moment the speed of our economy is slowing, the price of industrial goods is falling, the profits of private enterprises are falling, fiscal revenues are falling, and what’s more there are some risks accumulating in the fiscal sphere. Overall the situation facing our country’s development in 2016 will probably be more complicated,” he said.

Adding to China’s woes are global economic uncertainties ranging from commodity price fluctuations to increasing risk in fiscal and financial areas, Xu said.

“I think for this time period the slow recovery of the global economy and its slow growth is going to remain the situation, what’s more the financial upheavals, the dragging down of commodity prices and geopolitical risks cannot be underestimated and cannot be ignored. Therefore uncertainties and unstable factors in the global economic environment continue to exist,” said Xu.

China aims to keep its economy growing by at least 6.5 percent over the next five years, while pushing hard to create more jobs and restructure inefficient industries, Premier Li Keqiang said on Saturday (March 5).

At 6.9 percent China posted its weakest growth in quarter of a century last year, while fourth quarter growth came in at 6.8 percent, the lowest quarterly figure since the financial crisis.

Despite the weakening figures, Xu said China was not in for a hard-landing, as predicted by some economists.

“We have full ability to keep the Chinese economy operating within a reasonable range, we are full of confidence in the prospects for growth, I can say that the Chinese economy will absolutely not have a hard landing, so-called hard-landing predictions will absolutely be shown to be empty,” he said.

He added that plans to reduce industrial overcapacity are unlikely to result in large-scale layoffs, promising that economic growth will create more jobs and help offset the impact of restructuring of bloated industries.