MNI 5 Things: China Maintains 6.5% GDP Growth Targets In 2018

--Keeping CPI at 3%, Same Y/Y

--Seeking Policy Continuity and Stability

--Targeting Same Growth in Credit & Monetary Supply

     BEIJING (MNI) - The following lists the key observations on reports

released to media ahead of the opening of China's two-week National People's

Congress starting Monday, including Premier Li Keqiang's report on government

work. 

     - China aims to keep the economy growing 6.5% this year while limiting

inflation at 3%. While the GDP growth rate is slower than last year's actual

output of 6.9%, it is the same as the target set in March 2017, so actual growth

in 2018 may well top 6.5%. The GDP target, within people's expectations, is on

the medium-to-high end of the scale of expansion, and is more than enough to

meet China's goal of creating more than 11 million jobs this year, or doubling

GDP by 2020 from that of 2010. 

- Seeking continuity and consistency in macro policies, China will keep its

fiscal policy "proactive," targeting 2.6% debt-to-GDP ratio, a reduction of 0.4

percentage point from a goal set last year. This reflects China's determination

to contain its debt, while seeking "quality" growth: relying more on services

and innovation, promoting development of inland and western regions. Each

percentage point of growth in service economy creates 2 million new jobs. 

- "Prudent monetary policy will be kept neutral with appropriate levels of

tightness." Total social financing and M2 monetary supply will grow at similar

paces as the actual rates last year: TSF 12%, M2 8.2%. It will also maintain

"reasonable growth" in lending. 

     - The government will "effectively guide the levels of interest rates,

reform and enhance the supervision of cross-border capital flow." It will deepen

the market-based reform of interest and exchange rates, with the yuan exchange

rate "generally stable at adaptive and equilibrium level." 

     - China will reduce financial burdens on businesses and residents by CNY1

trillion this year, including a CNY800 billion cut in corporate and individual

taxes. Tax exemption limits for individuals will be raised, while minimum wages

will also be adjusted. 

     -- MNI Beijing bureau 

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI Beijing Bureau; tel: +86 (10) 8532-5998; email: beijing@mni-news.com

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86-10-8532-5998; email: beijing@marketnews.com

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