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No hard landing in store for the economy, Li says

By Xin Zhiming and Wang Yanfei | China Daily | Updated: 2017-03-16 07:53

Government possesses 'many tools' to handle any difficulties it may encounter this year, he promises

China is projected to see steady growth without the likelihood of a hard landing, Premier Li Keqiang said at a news conference on Wednesday, adding that the nation remains "an important growth engine" for the global economy.

Li said China, for years, has achieved sustained growth thanks to improvements in consumption and industrial upgrades, and that will continue.

On Tuesday, the nation released higher-than-expected results in macroeconomic data for the year's first two months, indicating growth remains steady. The data support analysts' projections that the economy will maintain stable growth momentum this year.

"I have continually heard voices saying China would encounter an economic hard-landing," Li said. "However, last year, despite the lowest global economic and trade growth in seven years, China maintained medium and high rates of growth.

"We will not suffer an economic hard landing. Instead, we will maintain medium and high rates of growth in the long run."

Li said China will not adopt mass stimulus measures but will continue to fuel growth momentum through deepened reform.

China's GDP growth target for this year of "around 6.5 percent" is not low given China's already large economic scale, and would not necessarily be easy for China to achieve, he said.

China will remain an important contributor of global economic growth this year, he told reporters after closure of the annual legislative session. The country contributed more than 30 percent of global growth in 2016.

Li conceded that the Chinese economy faces many uncertainties, but he dismissed the possibility of a financial crisis in the country.

"China's financial system, on the whole, is secure and there will not be systematic risks," he said. "Once we find financial risks, we will tackle them promptly to prevent them from worsening," he said. "We have many tools to tackle the situation."

He said China has ample foreign exchange reserves to satisfy the demands of imports and short-term debt repayments.

The nation's strong growth performance in the first two months has prompted many analysts to raise their forecasts of the country's growth prospects this year.

China's fixed asset investments are expected to continue their strong growth, and the momentum of the first two months is forecast to continue for the whole year, according to investment bank UBS. It has raised its forecast of China's GDP growth this year to 6.7 percent from previously forecast 6.4 percent.

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