Chinese economy facing major challenges, warns planning body chairman

China’s economy, currently on a slowdown mode, is facing challenges in investment and trade and may have to make “arduous efforts” to attain 6.5 per cent to seven per cent growth target for this year, China’s top economic planner warned on Wednesday ahead of the G20 summit. It is estimated that pressure will still remain in economic development in the second half of 2016 in the world’s second largest economy, Xu Shaoshi, chairman of the National Development and Reform Commission, the planning body of the country, told lawmakers here.

In his report on the state of the economy to the National People’s Congress (NPC) Standing Committee, Xu said it was expected that targets for poverty reduction, energy consumption, environmental protection and shanty town renovation would be met. “Great difficulties remain in meeting goals for investment and trade,” Xu said, elaborating on a national economic and social development report. “Currently, the foundations for stable economic development are not solid enough and downward pressure remains large,” state-run Xinhua news agency reported.

His comments came ahead of the G20 summit being hosted by China in Hangzhou city early next month where issues relating to halting the slowdown of the global economy and boosting international trade were expected to be high on the agenda. China’s economy mostly based on exports and manufacturing suffered as exports fell due to global economic slowdown. The Chinese economy itself slipped to 6.9 per cent last year and Xu indicated that the official target of 6.5 to seven per cent may be difficult.

Xu, however, expressed confidence that the country could meet major annual targets in economic growth, employment, commodity prices and residents’ income. Internationally, the global economy has not recovered as expected and trade protectionism has gained ground, Xu told lawmakers, adding that geopolitical risks and the increasingly complicated security situation in China’s periphery will disturb economic stability.