BEIJING |
BEIJING (Reuters) - China aims to boost domestic demand to keep the economy on a sound footing this year, a top government official said on Friday, amid expectations that the government will unveil more stimulus measures to combat a slowdown.
"We will ensure sound and fast economic growth this year," Du Ying, vice chairman of the National Development and Reform Commission (NDRC), China's most powerful economic planner, told a news conference.
But Du said the pace of economic growth, which is set to slow for a sixth consecutive quarter due to slackening demand at home and abroad, is still "within expectations".
Global markets were rife with speculation this week that China is about to unveil another round of fiscal stimulus to steady the world's No. 2 economy as Europe sinks deeper into its debt quagmire.
The government has been fast tracking infrastructure and industrial investment projects while doling out subsidies for energy-saving home appliances and cars to underpin demand.
But a senior NDRC official said this week there was little chance of China rolling out another giant spending package similar to that in 2008/2009, when Beijing pushed out a 4 trillion yuan ($628 billion) stimulus to fight the financial crisis.
Although the massive spending helped China's economy bounce back quickly from the depths of the crisis, it also left a trail of sour government loans in its wake.
Investor hopes that Beijing will step in to support the economy are unlikely to fade in coming weeks, especially after China's official purchasing managers' index was shown sinking nearly 3 points to a 2012 low of 50.4 in May.
Expectations are growing that the People's Bank of China could move to cut interest rates, at least lending rates, to deal with risks in growth and corporate profits.
The central bank has cut the amount of cash that banks must hold as reserves three times, each by 50 basis points, since November and analysts expect further cuts in the coming months.
($1 = 6.3690 Chinese yuan)
(Reporting by Koh Gui Qing; Editing by Ken Wills and Edwina Gibbs)
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