5 things to know about the Chinese economy as leaders meets

Instead of dramatic new reforms, Chinese leaders are likely to emphasize reining in surging debt and financial risks to keep growth steady at this year’s meeting of the ceremonial national legislature.
The ruling Communist Party is trying to build an economy driven by consumer spending instead of trade and investment. But that could be complicated by trade tensions with US President Donald Trump and slowing demand for export industries that support millions of jobs.
Analysts expect the legislature to focus on important but unglamorous goals such as controlling debt and beefing up regulation of financial markets.
GROWTH TARGET: Chinese leaders are expected to announce an annual economic growth target of about 6.5 percent, among the world’s strongest though slower than last year’s 6.7 percent expansion. The leaders are trying to shift public attention to improvements in incomes, consumer spending and other indicators but the growth target still is closely watched. The leadership has warned the outlook is “L-shaped,” meaning once the slowdown bottoms out, growth is unlikely to rebound to past double-digit rates.
FINANCIAL RISKS: After a decade of credit-fueled growth, regulators are trying to control debt, clear unpaid loans off the books of state banks and reduce risk in financial markets. Total debt owed by Chinese companies and local governments has soared from the equivalent of 150 percent of annual economic output before the 2008 financial crisis to about 260 percent. That has prompted warnings it could drag on growth.
ENTREPRENEURS: Reform advocates complain Beijing is moving too slowly on initiatives to open the state-dominated economy to private companies. The Cabinet has promised better foreign access to finance, insurance, telecoms, Internet services and other areas but has yet to disclose details.
TRUMP: A looming threat for Beijing is Trump’s campaign promise to raise import duties on Chinese goods to 40 percent, potentially disrupting industries that support millions of jobs. American companies are frustrated with Chinese restrictions on market access and want Washington to be more assertive but worry Trump could disrupt an important trading relationship if he acts recklessly.
OVERCAPACITY: Chinese leaders are shrinking bloated industries including steel and coal in which supply exceeds demand, but Washington and Europe want them to move faster. A supply glut has led to a flood of low-cost Chinese exports that are hurting foreign competitors and threatening jobs abroad.
Authorities said last year they planned to eliminate some 1.8 million jobs in steel and coal. This week, the labor minister said another 500,000 jobs in steel and coal would be cut this year but did not say if the reductions would include other industries like cement and glass.

Source: Arab News