China's economy will reach official target of 7.5 per cent: Premier Li Keqiang

BEIJING: Dismissing concerns of hard landing of China's economy due to slowdown, Chinese Premier Li Keqiang on Wednesday reassured the world about the health of China's economy saying the world's second largest economy will reach the official target of 7.5 per cent growth this year.

Pointing to the growing signs of stabilisation of China's economy during the past two months he told the opening ceremony of the three-day Summer Davos in the northeastern port city of Dalian that "such a development momentum of steady progress gives us the confidence that we can meet the economic and social development goals set for the whole year."

Li also tried to defuse concerns about the possibility of a hard landing, saying that "the Chinese economy, which is at a crucial stage of transformation and upgrading, is moving forward steadily and its fundamentals are good."

Regarding the local government debt issue, Li said the Chinese government had taken pertinent measures to regulate and address the problem, and the situation was "on the whole safe and manageable," state-run news agency Xinhua reported.

Two months ago, China had ordered a nationwide assessment of local government liabilities to address concerns about the rising debt from overambitious development projects which threatened the financial stability.

Their work is expected to update China's local government debt figures, which stood at 10.7 trillion yuan ($1.75 trillion) by the end of 2010.

Jiang Chao, chief analyst of the debt market with Haitong Securities, estimated that the amount of local government debt was around 15 trillion yuan (about $2.4 trillion) which including 9.5 trillion yuan in loans, three trillion yuan in trust funds, two trillion yuan in city investment bonds and 0.65 trillion yuan in local government bonds.

China's economy grew 7.6 per cent year on year in the first half of 2013.

Growth fell to 7.5 per cent in the second quarter of the year, declining from 7.7 per cent in the first quarter and 7.9 per cent in the final quarter of last year sparking concerns that for the first time in recent years, the country could miss the official target set at 7.5 per cent for this year.

Yesterday Li told delegates of the Summer Davos that China will strive to generate more jobs in coming years by launching additional reform policies and placing greater emphasis on the service sector's role.