MNI POLICY: Stimulus-Fed 6% Growth Risks China Future: Off'l

     BEIJING (MNI) - China shouldn't use stimulus to keep GDP growth above 6%,

as doing so would be at the expense of future growth and would places the

economy at the risk of a sharp correction, Liu Shijin, deputy director of the

Economic Committee of the Chinese People's Political Consultative Conference,

said Saturday.

     China's growth could fall by one percentage point in the next two years,

Liu said, noting it had now entered a new growth stage of 5%-6%, said Liu, a

member of the People's Bank of China monetary committee. The challenge of

managing the economy will be even greater next year as slowdown continues after

Q1.

     Here are the main points of Liu's speech at the 2019 China Reform Forum :

     - Current monetary policy is tilting toward loosening. Monetary policies

won't have much impact on issues including poor policy transmission, the

financial sector's ineffectual support for the real economy and high funding

costs faced by small businesses.

     - China has entered a 5-6% growth stage as the stimulation effect from

infrastructure, exports and real estate has peaked.

     - The declining labour force starting from 2018 will contribute to the

slowdown. Limited technologies, overburdened environment and resources have also

slowed growth.

     - Injecting private investment into some monopoly sectors, such as petrol,

gas, electricity, railway, communication and finance, will encourage efficient

investment and lower costs.

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

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