China likely to keep 2018 GDP target around 6.5 percent - policy adviser

FILE PHOTO: Fog blankets Jincheng City skyline in north China's Shanxi province March 2, 2007. REUTERS/Claro Cortes IV/File Photo

BEIJING (Reuters) - China will likely set its 2018 economic growth target at around 6.5 percent, unchanged from the previous year, leaving more room for quality growth as a government deleveraging campaign is set to intensify, a policy adviser was quoted as saying on Tuesday.

Lou Feng, a researcher at the Chinese Academy of Social Sciences, a state think tank, expects China to rely more on “innate drivers” for economic growth such as technology innovation in 2018, stressing the country is now minimising the importance of quantitative targets, according to Chinese newspaper 21st Century Business Herald.

China routinely sets an annual growth target which is widely watched by the market for clues on how much the government will likely stimulate the economy throughout the year.

A proposed target would be endorsed by top leaders at the closed-door Central Economic Work Conference in mid-December, and then announced at China’s annual congress in early 2018.

China lowered its 2017 growth target to around 6.5 percent from the previous year’s 6.5 to 7 percent, but its debt-fuelled investment binge has driven up infrastructure investment and real estate development, which has given the economy a surprise boost.

The Chinese economy is on course to hit an expansion of 6.8 percent in 2017, Lou said, according to the newspaper.

He said the government would seek to reduce overall leverage in the economy, pressing for a lower broad money supply against its gross domestic product (GDP) in the next step of a deleveraging campaign. Many analysts say efforts to cut high debt levels received a renewed push after the agenda-setting Communist Party Congress concluded in October.

Policy sources have told Reuters that China’s leaders are likely to maintain this year’s growth target of around 6.5 percent in 2018, even as they ratchet up efforts to prevent a destabilising build-up of debt.[nL3N1NQ3KT]

Reporting by Yawen Chen and Ryan Woo; Editing by Jacqueline Wong