China insists growth target will be met despite slump

Chinese prime minister Li Keqiang said the world's second economy faces challenges and downward pressures but there is no risk of a hard landing as the government is fully capable of supporting growth.

Li said his country is on track to hit its seven percent growth target despite difficulties brought on by a slump in the country's stock market. However, speaking at the World Economic Forum in the Chinese city of Dalian on Thursday, Li admitted the target would be hard to achieve.

Li acknowledged that the economy had “come under quite a number of difficulties and downward pressure” while stressing it remained in a “proper range”, a favourite phrase.

But he admitted that “deep-seated problems” were being exposed.

“China is an economy that is closely integrated with the international market,” he said. “Given the weak growth of the global economy, China cannot stay unaffected and the deep-seated problems that have built up over the years are also being exposed.”

He promised more measures to increase domestic consumption as the economy weans itself off export-led growth and also said Beijing would introduce policies to boost imports, he told the meeting in the north-eastern city.

However, he said China would never start a currency war by artificially devaluing the yuan and would instead keep it “basically stable at a reasonable and balanced level”.

His comments were designed to reassure countries which fear that the devaluation of the yuan in August would herald a “race to the bottom” for emerging currencies as they compete for faltering international demand for exports.