Business

China’s economy set to slow to 6.5% this year: Poll

BEIJING China's economy is expected to cool this year as a government-led crackdown on debt risks and factory pollution drag on overall activity, a Reuters poll showed yesterday.

Beijing is in the second year of a campaign to clamp down on everything from speculative property lending to shadow-bank financing activities as policymakers look to foster sustainable longer term growth.

That has pushed up borrowing costs and taken some of the momentum off the world's second largest economy, especially in the final months of last year, with growth forecast at 6.5 per cent this year, according to economists.

A government-led infrastructure spending spree, which contributed to better-than-expected growth last year, may "fare below expectations" due to tighter financial scrutiny, said Mr Zhang Yiping, an analyst with China Merchant Securities.

A crackdown on factory pollution, which shaved industrial output, is also expected to dent the broader economy.

China will keep its target for economic growth at "around 6.5 per cent" this year, unchanged from last year, policy sources have told Reuters.

It will announce Q4 and 2017 GDP growth tomorrow.

On the whole, the forecasts agree on a gradual, rather than a sharp, slowdown in growth as the authorities focus on turning off China's years-long addiction to cheap money without imperilling the economy. - REUTERS

BUSINESS & FINANCE