China’s Premier Li Keqiang said the world’s second-biggest economy is expected to have grown around 6.9 percent last year, the official Xinhua news agency reported, accelerating from a 26-year low in 2016.
In the past year, China’s economy has maintained a steady and favourable trend, with the overall situation better than expected, Li said at the Mekong-Lancang Cooperation Forum on Wednesday.
Analysts expect the economy to have grown around 6.8 percent last year, beating the government’s target of about 6.5 percent, thanks to a construction boom and robust global demand for Chinese exports. Gross domestic product expanded 6.7 percent in 2016.
The main reason why China performed well last year was because it refrained from “flooding” the economy with stimulus while pushing ahead with supply-side reforms and cultivating new sources of momentum, Li said.
Massive stimulus in the past to stop growth flagging as the global economy faced strong headwinds had led to massive borrowing by state-run firms and local governments.
Total debt in the second quarter of last year amounted to 255.9 percent of GDP, according to Bank for International Settlements estimates.
Policymakers have been relentless in their efforts to defuse financial risks amid a mountain of debt as China makes its gradual transition from a command to a market economy.
The country’s corporate leverage ratio declined at a steady pace last year, Li said, according to Xinhua.
China’s foreign exchange reserves also continued to rise last year, the premier said.
The country’s foreign exchange reserves rose to their highest in more than a year in December, blowing past economists’ estimates, as tight regulations and a strong yuan continued to discourage capital outflows.
The official 2017 GDP data is due to be published on Jan. 18.
Policy sources told Reuters previously that China will still keep its GDP growth target at around 6.5 percent in 2018 as Beijing seeks to balance efforts to reduce debt risks while keeping the economy on a steady footing.