Premier Li believes that renovating shanty towns will improve the living conditions of low-income families. (Photo : China Daily)
Premier Li Keqiang has expressed confidence that the nation will achieve its GDP growth target this year, as more positive factors will support the real economy, during a meeting with officials from Kazakhstan on Tuesday, Aug. 25, the Xinhua News Agency reported.
Li also said that the currency's exchange rate would remain stable at a reasonable level since a continuous devaluation of the yuan has no basis.
According to the report, China has set a GDP growth target of about 7 percent this year and it has managed to achieve a growth rate of 7 percent during the first half of this year.
A research note from HSBC Holdings Plc. however, said that China's economy is expected to gain momentum in the second half of 2015 due to expected pro-growth measures, despite recent market volatility, lackluster manufacturing conditions and the yuan's depreciation.
Qu Hongbin, chief China economist of the London-based HSBC, wrote in the note that the economy will have a modest recovery during the rest of the year, following its slowdown.
"We maintain our full-year GDP forecast at 7.1 percent," Qu said.
The report said that weak factory activity has raised concerns about the economy, as the Caixin Flash China General Manufacturing Purchasing Managers Index dropped to 47.1 in August, the lowest reading since March 2009.
Adding to concerns that the government lacked policy options, the weakening yuan and the plunging stock market have also affected the economy.
Qu, however, said that policymakers still have the monetary and fiscal solutions to support the economy, as the central bank is ready for more monetary easing measures to prevent the slide.
On Aug. 25, China reduced both interest rates and banks' reserve requirement ratio in an effort to boost growth.
Qu added that China's untapped policy potential could help China pull itself out of deflation and eventually bring it to the top of the list of economies.
