China rules out stimulus to spur growth

BEIJING: China's top economic planner today ruled out injecting any strong stimulus to spur economy, but said the government would take steps to encourage multi-pronged investment and increase investment efficiency for growth.

Speaking after Chinese Premier Li Keqiang, who announced lowering China's economic growth target to around 7 per cent in 2015, minister in charge of the National Development and Reform Commission Xu Shaoshi said there were no plans to introduce any stimulus for the world's second largest economy that is witnessing a downward spiral.

Xu, however, underlined importance of investment, which he believes continues playing a key role in promoting Chinese economy.

"We need to encourage multi-pronged investment and increase investment efficiency," he said at a press conference.

In his budget, Li has announced plans to start a host of infrastructure projects.

China wants to avoid economic growth based only on investments and instead look to have a consumption-driven growth rate.

Speculation about a stimulus was rife as China announced USD 570 billion stimulus package in 2008 to revive the economy following global economic crisis.

Xu said that more investment will be made to increase the supply of public products and services, ranging from information technology and electricity to railway and water conservancy projects, in China that is still lagging behind industrialised countries in infrastructure construction.

Premier Li, in his government work report to the annual session of the national legislature, said China will invest more than 800 billion yuan (USD 130 billion) in railway construction and another 800 billion yuan in major water conservancy projects in 2015.

Xu promised to ease the investment and financing regulation and make the Chinese market more accessible to domestic and overseas private investors.