MNI: China Says Has "Significant Leeway" to Counter Trade War

By Iris Ouyang

     BEIJING (MNI) - China stressed Wednesday it has "significant leeway" to

counter any negative impacts from the China-U.S. trade war, while making sure

its economic targets are met this year.

     "China has huge development potential and resilience and significant

leeway, making the impact of the trade war controllable," Cong Liang,

secretary-general of the National Development and Reform Commission, said at a

press conference in Beijing.

     China is totally able to "digest" the trade spat's impacts on its trade

through expanding its domestic market and consumption, as well as by stabilizing

domestic investment, Cong said.

     Playing down impacts of the trade war, Cong said the $200 billion tariffs

imposed on China would affect less than 10% of annual exports, whose

contribution to the overall economic volume has edged down in the past five

years.

     "We are capable of and have enough ability to counter the impact of the

current trade conflicts to make sure the targets of economic and society

development which we set at the beginning of this year would be accomplished,"

Cong said, indicating the world's second largest economy would strive to

maintain its GDP growth at "around 6.5%" this year.

     "We have a huge market and strong momentum for reform and opening," he

said. "Unlike some country, we are constantly further opening up and deepening

our reform."

     --INFRASTRUCTURE SPENDING

     In response to several questions from reporters regarding the government's

plan to enhance infrastructure investment, Cong stressed it does not mean

expanding infrastructure projects on a large scale but to "truly improve

weaknesses" in the country's infrastructure. For example, improving inter-city

or inter-region road links and enhancing around healthcare, education and

facilities for retirement would be the related efforts.

     Risk controls will be enforced during the process to boost infrastructure

investment. "We will effective prevent new local government debt or invisible

debt from forming," Cong said.

     The deleveraging campaign will be improved by facilitating market-based

debt for equity swaps, clearance of zombie companies from the market and

structural deleveraging of state-owned enterprises, he said.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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