Ruling out a new stimulus package to halt the slowdown of its economy, China today said the new growth target of 6.5-7 per cent can be attained by improving domestic demand, consumption and innovation without resorting to special measures like devaluation of currency.
The growth targets set for this year and the 13th Five-Year Plan period (2016-2020) can be realised through improving domestic demand, consumption and innovation, without big stimulus, Zhou Xiaochuan, Governor of the People's Bank of China (PBOC), said.
"China will stick to the prudent monetary policy," Zhou told a press conference on the sidelines of the national legislature's annual session.
China has set its growth target for 2016 in the range of 6.5-7 per cent, while that for years leading to 2020 is above 6.5 per cent.
These are "anticipatory targets" which are made on the basis of China's growth trajectory in the past and its growth potential in the future, Zhou said.
He said with the improvement in domestic demand, consumption and innovation, the growth targets are attainable without resorting to stimulus.
While ruling out stimulus to revive the economy like it did in the past, China, however, has been approving huge infrastructure development projects costing billions of dollars like the second rail link to connect Tibet.
Zhou saidChina seeks growth by relying more on domestic demand as the old growth driver of exports loses steam and is not able to contribute to the economic growth the way it used to.
He said China has no intention of manipulating its currency rate to stimulate exports.
The fall of exports accelerated the economic slowdown as the GDP last year slipped below 6.9 per cent, the worst in 26 years.
Last month, speaking at the G20 Finance Ministers and Central Bank governors meeting in Shanghai, Zhou assured the world that China would not drastically devalue its currency to boost its trade.
Near four per cent devaluation of yuan last year sent the world markets in a tizzy. The devaluation following series of stock market crashes was reportedly aimed at boosting falling export revenues.
Today Zhou dismissed the concerns over exports decline saying the market should pay more attention to China's net exports, citing nearly USD 600 billion of goods trade surplus in 2015.
"The share of China's exports edged up in the global trade," Zhou said.
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Investment growth by state-owned enterprises also slowed to 21.8 per cent in the first seven months, from 23.5 per cent in the first half.
Infrastructure investment jumped 19.6 per cent during the period, decelerating from 20.9 per cent in the first half.
Breakdown of today's data shone a light on the economy as new development dynamics gained steam, with new industries, new technologies, new services and new business models prospering.
Output of the high-tech industry climbed 12.2 per cent in July, accelerating from June's 10.6-per cent increase.
New energy car production grew 52.5 per cent in July.
Revenues of strategic emerging services gained 15.6 per cent year-on-year in the first half as per NBS data.
However, Sheng noted the new economy was not strong enough to pick up the slack.
