Interview: Mexican economist says China's growth target feasible despite global downturn

China's economic growth target of at least 6.5 percent a year over the next half decade is feasible, despite the dismal global financial outlook, said Mexican economist Adrian de Leon on Saturday.

"Right now, the global outlook is marked by a lot of uncertainty, but in general, the target sounds conservative and reasonable," said de Leon, director of the School of Economics at the University of Guadalajara (UDG) in west-central Mexico, referring to the target growth rate announced Saturday during the opening session of the Chinese National People's Congress (NPC), the nation's top legislative body.

What's more, de Leon told Xinhua that, the announcement of Beijing could have the added benefit of calming jittery global markets which reacted nervously to the news at the start of the year that China's economy grew at a rate of 6.9 percent in 2015, the lowest in 25 years.

At least, that's what should occur "in principle," said de Leon, acknowledging that "global politics can sometimes sow uncertainty about China's economy to pressure it into making certain changes."

While addressing the NPC, Chinese Premier Li Keqiang said that the country sets this year's economic growth target at between 6.5 and 7 percent and aims to hold this year's inflation rate at around 3 percent.

Officials also plan to generate 10 million new jobs in the cities, mainly in the services sector.

The figures show the government has identified potential weak spots as it pursues reforms to transform the country's investment-driven economic model to one fueled by domestic consumption of both goods and services, and new technologies, said de Leon.

"The government's solution is to adjust (the economy), so that it serves more for the production of consumer goods for its own population," as opposed to export markets, said the economist.

China expects to initially cut some 1.8 million jobs in the steel and coal sectors as part of its economic restructuring, which calls for reducing the high number of state companies, whose growth has led to an excess of physical capital, such as machinery and other production assets.

"China was investing at a very high rate in recent decades and that investment was made through subsidies and government credit, and now it has relatively abundant capital, in factories and companies, which exceeds its current capacity for growth," de Leon explained.

The Asian giant, he believes, is in time to plan for the reassignment of its labor force away from traditional industries to new sectors.

One potential problem that also requires the government's attention is the banking sector, said de Leon.

To avoid a banking crisis, China should pay more attention to struggling companies that have in the past expanded thanks to generous financing, and in today's slower economic age, may have difficulty in paying back loans, the economist said. Endi