China’s Li Says Conditions for Growth in Place, CCTV Reports

Chinese Premier Li Keqiang said that the conditions for the world’s second-biggest economy to achieve its growth targets are in place, China Central Television reported yesterday.

The conditions exist for China to realize its economic targets for this year and for sustainable, healthy development, CCTV cited Li as saying in a meeting with leaders from central and eastern Europe.

The comments come after Goldman Sachs Group Inc., China International Capital Corp., Barclays Plc and HSBC Holdings Plc pared their growth projections this year to 7.4 percent, below the government’s 7.5 percent goal disclosed at the March conference at which Li became premier. While the country’s worst credit crunch in at least a decade eased further yesterday, two gauges of manufacturing fell last month.

Economic expansion has stayed below 8 percent for the past four quarters, the first time that has happened in at least 20 years. In a sign the government may tolerate further deceleration, President Xi Jinping said officials shouldn’t be judged solely on their record in boosting gross domestic product, the official Xinhua News Agency reported on June 29.

An official Purchasing Managers’ Index dropped to 50.1, the lowest level in four months, from 50.8, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing on July 1. A private PMI from HSBC Holdings Plc and Markit Economics was 48.2, the weakest since September. Readings above 50 signal expansion. The reports underscore the sustained slowdown in the nation’s economy as the government seeks to rein in financial speculation and real-estate prices.

China’s clampdown on excessive short-term borrowing, aimed at wringing speculative lending out of the banking system, sent the overnight repurchase rate to a record 13.91 percent last month. While the rate fell back to a one-month low of 3.71 percent yesterday, that exceeds the 2.91 percent average over the last 12 months.

— With assistance by Bonnie Cao

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