China capable of achieving steady GDP growth in 2017: Standard Chartered

BEIJING - China is capable of achieving steady GDP growth this year despite global uncertainties, according to Standard Chartered Bank.

"We expect China to continue to set its GDP growth target at about 6.5 percent for 2017 and the world's second largest economy could grow 6.6 percent this year," Ding Shuang, chief Greater China economist with Standard Chartered, told Xinhua in a recent interview.

Ding pointed out that US policies towards China and elections in post-Brexit Europe might complicate the international environment for the Chinese economy, while domestic slowdowns in the property and automobile markets might drag on consumption growth.

China's real estate market will see slower sales pace as tightened regulations began to bite, while the sales of passenger cars showed signs of contraction by dropping 1.1 percent year on year in January.

However, Ding said that other engines of economic growth were gaining steam in China.

He said that the service sector would grow faster in 2017 as Chinese would demand better entertainment, health care, education and travel experiences, which could contribute to about 60 percent of GDP.

Meanwhile, China's exports seem to be restoring momentum after a subdued performance last year. The country's foreign trade volume beat market expectations to grow 19.6 percent year on year in January.

In addition to a lower comparison base and Spring Festival effects, the global economy is showing positive signs as the latest PMI figures in the United States and some European countries showed growing factory and service activities, according to Ding.

He added that the yuan's previous depreciation would gradually help lift export performance.

Ding pointed out that to sustain steady growth at about 6.5 percent, China would still have to combine effective policy tools.

"While China decided to take a prudent and neutral monetary stance, the government needs to take more proactive fiscal policies to help prop up growth," Ding said. "China's debt level is still controllable and the government can lift the fiscal deficit-to-GDP ratio from 3 percent in 2016 to 3.5 percent this year.