BEIJING: China鈥檚 economy is on track to meet its official growth target for 2017, the head of the state planning agency said on Saturday, despite a punishing war on pollution which is expected to slash industrial output over the winter months.
China has forced 28 cities in smog-prone northern regions to reduce emissions of airborne particles known as PM2.5 by at least 15 percent from October to March 2017, with some cities expected to cut steel production by as much as 50 percent.
But officials with the National Development and Reform Commission (NDRC) said the world鈥檚 second-largest economy will remain on track.
鈥淲e expect to achieve the full-year growth target of about 6.5 percent,鈥� He Lifeng, chairman of the National Development and Reform Commission (NDRC), told a briefing on the sidelines of China鈥檚 Communist Party Congress.
Most economists believe China鈥檚 actual growth should easily beat the target. The economy grew 6.8 percent in the third quarter of the year, and 6.9 percent in the first half. Last year鈥檚 growth rate of 6.7 percent was a 26-year low.
China鈥檚 economy has surprised global markets and investors with robust growth so far this year, driven by a renaissance in its long-ailing 鈥渟mokestack鈥� industries such as steel and stronger demand from Europe and the United States.
But economists with Societe Generale said in a recent note that the winter output cuts could slash industrial production growth by 0.6-0.8 percentage points and GDP growth by 0.2-0.25 percentage points in the next six months.
Industrial growth slowed to 6.3 percent in the third quarter, from 6.6 percent in the previous period, data showed last week, with the services sector taking up much of the slack.
Prices of commodities like steel, copper and iron ore have turned wildly volatile in China and in global markets recent weeks on fears of possible winter shortages.
China鈥檚 steel output dropped 3.7 percent in September from a record high the previous month as mills reduced production in line with Beijing鈥檚 campaign, and analysts predict further declines as winter curbs set in.
However, Zhang Yong, vice-chairman of the NDRC, told reporters that the direct impact was likely to be limited.
鈥淢easures to fight pollution don鈥檛 have a big impact on economic growth,鈥� he said. 鈥淢easures to treat pollution have a positive impact on economic development in the long term.鈥�
The government has been pushing a restructuring program designed to 鈥渦pgrade鈥� its heavy industrial economy, cut pollution and tackle profit-sapping capacity gluts in sectors like steel and coal.
China says it has cut annual crude steel capacity by as much as 110 million tons over the last five years, with coal capacity slashed by as much as 400 million tons, though some analysts say much of the outdated, inefficient plants are merely being replaced with leaner, cleaner ones.
Ning Jizhe, vice head of the NDRC and also head of China鈥檚 National Bureau of Statistics, said the country would continue to crack down on steel overcapacity, prevent obsolete plants from restarting and promote more mergers in the sector.