By Abu BakarrKargbo
China commercial banks’ non-performing loans (NPL) ratio was 1.74 percent at the end of the fourth quarter of 2016, the lowest ratio in the four quarters of last year, according to data released during a press conference held recently. The banks’ NPL stood at 1.5 trillion yuan (217.6 billion US dollars) in the fourth quarter of 2016, with the lowest quarter-on-quarter growth in the past three years. Five members of the 12th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body, insisted that China is “seeking stable and healthy economic development” through the ongoing supply-side structural reform.
The political advisers said China is still in the transforming phase, and the country has a long way to go before reaching the end of structural adjustment. However, the country should be alert to financial risk.
Financial risk is controllable in China currently, but the CPPCC members warned, citing Premier Li Keqiang’s annual work report, that steady steps should be taken to advance the reform of the financial regulatory system and build a firewall against financial risks.
The advisers also noted that supply-side structural reform and technological innovation are the main driving forces for the country’s economy development. Technology innovation should be highlighted in agriculture and industry fields, they stated.
Since China’s development has benefited from demographic dividend, now the country is transforming to meet the talent dividend, which is also a key push for supply-side structural reform, according to the CPPCC members. Recent years have seen Chinese colleges and universities enrol seven million students annually, and China currently has 36 million college and university students, the largest number in the world.
When asked about if there is a possibility that China’s GDP growth would surpass the target of 6.5 percent set by the work report delivered by Premier Li, one of the political advisers, Li Yining, reiterated ng the growth target is expected to be “around” 6.5 percent and Consumer Price Index (CPI) to rise from 2% to 3% for 2017. The government hopes to provide eleven million new urban jobs, and reduction of at least 3.4 percent in energy consumption per unit of GDP, and also continued reductions in the release of major pollutants.
Being the second largest economy in the world, China hopes to put in place this year structural adjustment through reforms so as to maintain its economic stators and accelerate growth. One of which is to cut down on steel production capacity for around fifty million metric tons; and at least 150 million metric tons of coal production facilities are to be closed.
“At least fifty million kilowatts of coal-fired power generation capacity will be cut through closures, and suspensions or postponement of constructions,” r4eport states, noting further that home buying in urban areas for personal use by both local and new residents will be supported.
In the business sector, the focus will be given to bringing down the leverage of enterprises, while the government is working to control overall leverage. More small businesses with low profits will enjoy preferential corporate income tax policy, and government-managed funds will undergo a complete overhaul.
“35 administrative charges paid by enterprises to the central government will be abolished of suspended, and government-set operating fees for businesses will be reduced, to significantly lower costs for enterprises,” Officials say.
The number of rural residents living in poverty will be further reduced by 10 million, including 3.4 million to be relocated from unfriendly areas.
The Government of President Xi Jinping has assured that more will be done in implementing targeted poverty reduction and elimination measures, and that the capacity of public services, infrastructure, and innovation to sustain development will be raised.