BEIJING (Reuters) - China is certain to hit the government’s economic growth target of 7.5 percent for 2012 and could even exceed it, Commerce Minister Chen Deming said on Wednesday.
Chen made the comment at a conference, adding that China would likely spend more than $70 billion this year on non-financial outbound direct investment.
“In the first three quarters, China’s economy has grown 7.7 percent from a year ago, therefore, it is for certain that we can achieve the annual GDP target of 7.5 percent or above, ” Chen said in a speech.
The minister’s remarks on growth echo those made by an official from the National Bureau of Statistics in October when economic data for the third quarter revealed annual growth had dipped to 7.4 percent.
China’s growth rate has slowed for seven successive quarters and is on course for its weakest full year of expansion since 1999, albeit at a pace that far outstrips the rest of the world’s major economies.
Analysts polled by Reuters expect China, the world’s second biggest economy, to grow by 7.7 percent in 2012.
Beijing has followed a program of fine-tuning of economic policies - cutting interest rates, freeing more cash for lending and approving a raft of infrastructure projects - for the last 12 months in an effort to underpin an economy currently caught in its slackest period of activity since the 2008-09 global financial crisis.
China’s exposure to the global trade cycle has seen growth crimped by a slow recovery in the United States and a lingering financial crisis in the European Union - the two biggest markets for goods from the country’s factories.
China’s $1.9 trillion of exports were worth about 31 percent of GDP in 2011, according to World Bank data and about 200 million Chinese jobs are estimated to be supported by the external sector.
Being levered to external demand makes Beijing particularly sensitive to the risk of protectionism - even more so as the government seeks to broaden the structure of the economy and put more of its huge $3.2 trillion stockpile of foreign reserves to work through outbound direct investment.
Chen said the trend for China to increase its outbound investment would continue for years to come.
“As you know, China has more than $3 trillion of foreign exchange reserves, which has provided (favorable) conditions for our outbound investment,” he told the conference.
“I think the non-financial outbound investment this year will be larger than last year and likely top $70 billion.”
China’s outbound direct investment from non-financial firms in the first 10 months totaled $58.2 billion, up 25.8 percent year-on-year, Ministry of Commerce data shows.
Outbound direct investment rose 8.5 percent to $74.7 billion in 2011, extending a decade-long expansion streak. The government is targeting a total of $560 billion in outbound foreign direct investment in the five years to 2015.
The head of China’s $482 billion sovereign wealth fund told Reuters in an interview earlier this month that he detected a rise in protectionism in Western economies and that the fund would not invest where it was not welcome.
Tensions have risen recently between an increasingly wealthy and acquisitive China and many of its Western trading partners still struggling to recover from the effects of the global financial crisis and where companies hungry for investment capital are up for sale.
A series of trade actions against China by President Barack Obama, including his blocking of a privately owned Chinese company from building wind turbines close to a U.S. military site, and his challenge of Chinese auto and auto-parts subsidies in a World Trade Organization case, have increased the friction.
China’s state-owned CNOOC Ltd (0883.HK) and its Canadian takeover target Nexen Inc NXY.TO on Tuesday withdrew and resubmitted an application for U.S. approval of a proposed $15.1 billion tie-up, as Canada gets close to its decision on whether to approve the transaction.
A brief statement did not provide a reason for, or the timing of, the unexpected move. It was not immediately clear whether the announcement meant the process had hit a snag or signaled a delay in closing the deal, which has become a topic of heated debate in Canada.
Editing by kIM cOGHILL