BEIJING — China’s economic growth will likely slow to 6.5-6.8 per cent this year, a senior official at the country’s top economic planner wrote in the Beijing Daily on Monday, while warning about the risks of “Black Swan” and “Gray Rhino” events.
Black swans, or unforeseen occurrences, and gray rhinos, or highly obvious yet ignored threats, are likely to occur this year with adverse consequences, Fan Hengshan, vice secretary general of the National Development and Reform Commission (NDRC), wrote in a commentary in the state-controlled newspaper.
China’s economy grew 6.9 per cent in 2017, the first annual acceleration since 2010. That pace easily beat the government’s 2017 target of around 6.5 per cent, welcome news for policymakers looking to curb financial risks and cut corporate debt.
“My personal opinion is that economic growth this year is very likely to exceed 6.5 per cent, roughly between 6.5 and 6.8 per cent,” Fan said.
Property and infrastructure
Separately, former central bank chief economist Ma Jun said growth may ease to around 6.5 per cent this year, due to a slowdown in property sales and lower infrastructure investment, Chinese financial news provider Yicai reported on Monday.
Policy sources have told Reuters that China will keep its target for economic growth at “around 6.5 per cent” in 2018, unchanged from last year.
Analysts polled by Reuters earlier this month also predicted a slowdown to 6.5 per cent this year as government-led crackdowns on debt risks and factory pollution drag on overall activity.
China will focus on fending off risks this year, particularly risks that will impact regions and cause systemic fluctuations, the NDRC’s Fan said.
“To this end, we must remain highly vigilant and enhance our sense of urgency,” Fan said.
Earlier this month, China’s banking regulator chief told the official People’s Daily in an interview that a black swan event could threaten the country’s financial stability, adding that risks, while still manageable, are “complex and serious.”
Global credit rating agencies S&P and Moody’s both downgraded China’s sovereign credit rating last year, citing worries about its rapid build-up in debt after years of credit-fueled stimulus used to meet official economic growth targets.
China’s finance ministry said the S&P downgrade was “a wrong decision” that ignored the economic fundamentals and development potential of the world’s second-largest economy.