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China says economy ‘not landing hard’

China says its economy is not headed for a hard landing.

China said on Sunday that its economy is not headed for a hard landing, but emphasized that uncertainty and instability in the global economy do pose a risk to the country's growth.

"China will absolutely not experience a hard landing," Xu Shaoshi, head of the National Development and Reform Commission (NDRC), told reporters at a briefing. "These predictions of a hard landing are destined to come to nothing," Reuters reported. 

China's economy grew 6.9 percent in 2015, the slowest pace in a quarter of a century, but still comfortably the fastest among major economies.

It has set a growth target of 6.5 percent to 7 percent for this year, introducing a band rather than a hard target as it seeks greater flexibility in juggling growth, job creation and restructuring of a host of "zombie companies" in bloated industries.

On Saturday, Premier Li Keqiang outlined a series of targets on issues such as energy consumption, job creation and inflation but few details on how they would be met.

Many investors had been hoping China would post an aggressive target for fiscal spending to prop growth.

But the draft goal of running a fiscal deficit equivalent to 3 percent of GDP, while up from the previous year's target of 2.3 percent, disappointed some.

Xu emphasized that China will work to improve the "efficiency" of government investment, suggesting a desire for more targeted spending. 

That would be a contrast to the last stimulus injection after the global financial crisis when Chinese local governments built ghost cities, roads to nowhere and airports to juice growth, Reuters added.

China has massive foreign exchange reserves of more than $3 trillion to tap if needed, but a sharp decline in reserves in the past 18 months as Beijing sought to support its yuan has rattled some investors.

Central bank vice governor Yi Gang on Sunday reiterated Beijing will keep the yuan basically stable and there was no basis for continued depreciation.


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