China's economic
growth is likely to slow to 6.5 percent this year and cool further to
6.3 percent in 2018, the OECD said, though exports are set to pick up as
global demand strengthens.
The
Organisation for Economic Co-operation and Development also warned of
China's ballooning corporate debt in its bi-annual economic outlook
report released on Tuesday.
China's corporate debt is about 175 percent of GDP, one of the highest in emerging market economies, he said, with state-owned enterprises (SOEs) accounting for around 75 percent of that.
Such guarantees have enabled SOEs and local government investment vehicles to continue accumulating debt, she said.
Financial risks in China are mounting because of indebted enterprises, growing non-bank activities and enormous overcapacity, the report said.
The OECD's forecast for 2017 is in line with the Chinese government's growth target of around 6.5 percent this year, versus last year's 6.5-7 percent range. The economy grew 6.7 percent in 2016, the slowest pace in 26 years.
Some analysts believe the more modest target will give policymakers more room to tackle debt risks and push through painful reforms, though authorities are expected to proceed cautiously to avoid hurting growth.
Economic growth remains high "but is gradually and appropriately moderating as the population ages and the economy rebalances from investment to consumption," the report said.
Export volumes are expected to grow 3.4 percent this year and 3.3 percent next year, up from 2.3 percent in 2016, due to increasing global demand.
The world's second-largest economy needs more innovation, entrepreneurship, effective corporate governance and reform of its state-owned sector, the OECD added.
The report did not single out the threat of rising protectionism from the United States but noted that protectionism by some trading partners would hurt Chinese exports
China's corporate debt is about 175 percent of GDP, one of the highest in emerging market economies, he said, with state-owned enterprises (SOEs) accounting for around 75 percent of that.
Such guarantees have enabled SOEs and local government investment vehicles to continue accumulating debt, she said.
Financial risks in China are mounting because of indebted enterprises, growing non-bank activities and enormous overcapacity, the report said.
The OECD's forecast for 2017 is in line with the Chinese government's growth target of around 6.5 percent this year, versus last year's 6.5-7 percent range. The economy grew 6.7 percent in 2016, the slowest pace in 26 years.
Some analysts believe the more modest target will give policymakers more room to tackle debt risks and push through painful reforms, though authorities are expected to proceed cautiously to avoid hurting growth.
Economic growth remains high "but is gradually and appropriately moderating as the population ages and the economy rebalances from investment to consumption," the report said.
Export volumes are expected to grow 3.4 percent this year and 3.3 percent next year, up from 2.3 percent in 2016, due to increasing global demand.
The world's second-largest economy needs more innovation, entrepreneurship, effective corporate governance and reform of its state-owned sector, the OECD added.
The report did not single out the threat of rising protectionism from the United States but noted that protectionism by some trading partners would hurt Chinese exports
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