PREMIER LI PLEDGES MARKET SOLUTIONS FOR CHINA ECONOMY

Li pledges `market solutions' for economy -

Tuesday, January 12, 2016

China will use market solutions to ease its overcapacity woes and will not use investment stimulus to expand demand, Premier Li Keqiang said during a recent visit to northern Shanxi province, according to state media.
"We will let the market play a decisive role, we will let businesses compete against each other and let those unable to compete die out," the state-run Beijing News quoted Li as saying. "At the same time, we need to prioritize new forms of economic development."Li said the country needs to improve existing production facilities because even during an enormous steel glut last year, China had to import certain high-quality steel products including the tips of ballpoint pens. China needs to set ceilings on steel and coal production volumes, the premier also said, according to the article which was reposted on the State Council's website. Meanwhile, the China Securities Journal quoted a top state adviser as saying that China will face great difficulty in achieving economic growth above 6.5 percent over the 2016-2020 period due to slowing global demand and rising labor costs at home.Li Wei, president of the State Council's Development Research Center, made the comments at a conference over the weekend.UBS global economist Paul Donovan also expects China's economic growth to slow. He sees China growing 6.2 percent this year, 5.8 percent next year, and 5 percent to 5.5 percent in coming years.China and other Asian economies will see continuing deleverage and reduced credit growth, leading to decreased investments in property and construction markets, he warned. Donovan believes the United States and Europe will see better growth this year. STAFF REPORTER AND REUTERS