China debt risks spur internal debate over lowering 2017 growth objective
China's growing debt along with property risks have generated an internal debate over whether China needs to tolerate growth as low as 6% next year, just to ensure more room for painful reforms aimed at diminishing industrial overcapacity as well as indebtedness.
The government has reported that economic growth of about 6.5% is required every year through to 2020 in order to meet a previously stated objective of doubling GDP and per capita revenue by 2020 from 2010 levels. It’s about a 6.5-7% growth objective this year.
A great number of advisers expect the Chinese authorities to stick to this year's target in 2017. Others hope that the goal will be adjusted to about 6.5% to ensure a slightly lower expansion rate in 2017.
However, some advisers ascertain that maintaining growth above 6.5% turns to be unrealistic because it will make the government keep up costly economic stimulus measures, which have stoked worries regarding a steep surge in the credit as well as property market.