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Saturday, April 22, 2017, 14:58

PBOC chief: China's growth target within reach

By Xinhua

PBOC chief: China's growth target within reach
Governor of the People's Bank of China Zhou Xiaochuan answers a question at a press conference during the Fifth Session of the 12th National People's Congress (NPC) in Beijing on March 10, 2017 . (WANG Zhao / AFP)

WASHINGTON - China's economy is on track to reach its growth target of around 6.5 percent this year with financial risks "well under control," the country's central bank chief said on Friday.

"The strong momentum has been maintained in the first quarter of 2017. The gross domestic product (GDP) grew by 6.9 percent year-on-year and inflation by 1.4 percent," Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said in a statement.

As the growth of investment and trade stabilized and recovered, consumption grew steadily, and employment remained broadly stable

Zhou Xiaochuan, governor of the People's Bank of China

The statement was released by the International Monetary Fund (IMF) on its website for a meeting of the International Monetary and Financial Committee (IMFC).

"As the growth of investment and trade stabilized and recovered, consumption grew steadily, and employment remained broadly stable. The expected 6.5 percent growth for this year is within reach," he said.

READ MORE: China eyes sustained economic growth through reforms

Zhou said China is "fully confident" about preventing and eliminating systemic financial risks, as the profitability of industrial enterprises has improved significantly and the banking sector's capital and provisions remain adequate.

"The corporate and the financial sectors are broadly resilient, with risks well under control," he said.

Going forward, monetary policy will remain "prudent and neutral," striking a better balance between stabilizing growth and the task of deleveraging, preventing asset bubbles, and containing the accumulation of systemic risks, the central bank governor said.

Zhou reiterated that the Chinese government will continue to "push forward reforms on all fronts," including reforms in the financial sector, the fiscal and taxation system, and the state-owned enterprises, as well as addressing excess capacity in the coal, steel and other industries.

In terms of IMF reforms, Zhou said the IMF should continue to advance the quota and governance reform to ensure that the institution remains quota-based and adequately resourced.

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"The 2010 quota and governance reform has not significantly closed the gaps between the actual and calculated quotas, and between members' calculated quota shares and their actual weights in the global economy," he said.

The IMF should also continue to promote the reform of the international monetary system, Zhou said, noting "globalization calls louder for a more stable international monetary system."

He believed that the IMF's reform of the Special Drawing Rights (SDR) basket has laid a good foundation for reserve currency diversification, contributing to the stability of the international monetary system.

Last year, the IMF included the Chinese currency, the Renminbi (RMB), into the SDR basket as a fifth currency. It's the first time for the IMF to include a currency from an emerging market economy in its elite reserve currency basket.

"We support the IMF's work on broadening the role of the SDR, and expect more targeted and sustained efforts from the perspective of addressing the inherent weaknesses in the existing international monetary system," Zhou said.

Yi Gang, deputy governor of the PBOC, also said on Friday that China's central bank could play a role in promoting the wider use of SDR, noting China has started reporting foreign reserves and international balance of payment data in SDR.

He suggested that market institutions could increase the use of SDR as an accounting unit, which could encourage their participation in the SDR market and inject more liquidity into the market.

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