Economic Pulse

    Financial risk 'biggest challenge' for China

    (Xinhua)
    Updated: 2013-03-07 13:27

    BEIJING - Financial risk will remain the biggest challenge for the Chinese economy as over-reliance on investment to power the economy amid urbanization drive would increase debt burden for local governments, senior economist Li Yining said Thursday.

    Financial risk 'biggest challenge' for China 

    China's economic growth has largely been driven by investment over the past years and a large amount of money has been spent to boost urbanization.

    Local governments must watch out the debt risk and try to use the investment more efficiently, Li said at a press conference.

    Li estimated that the Chinese economy in 2013 will steadily grow to meet the 7.5-to-8-percent growth target.

    "It has now become normal for the Chinese economy to maintain an annual growth rate of 7 to 8 percent. China will no longer maintain the two-digit annual growth seen in previous years," said Li.

    He said the inflation could be kept at around 3.5 percent only when the oil and food prices remain stable.

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