"China's economy in the third quarter not only extended growth momentum in the first half but showed many positive changes," Li said in the speech in Macau that was broadcast live on state television.
Key indicators such as factory output, company profits and investment have rebounded, he said, ahead of China's release of third-quarter gross domestic product (GDP) data on Oct. 19.
More than 10 million new urban jobs were created in the first nine months, with the survey-based jobless rate falling below 5 percent in September, he said, while acknowledging that the economy still faces downward pressure.
China will be able to achieve its main economic targets this year and maintain medium- to high-speed growth, he said.
The government is aiming for annual economic growth of 6.5-7 percent in 2016, compared with 6.9 percent in 2015, the slowest expansion in a quarter of a century.
Despite a rocky start to the year and stubbornly weak exports, China's economy grew 6.7 percent in the first half, buoyed by higher government infrastructure spending and a housing market frenzy which is beginning to raise fears of overheating. HSBC expects a similar rate of expansion in third quarter.
Wall Street Journal survey economists and they are concerned about China's housing bubble
Stimulus measures appear to have stabilized China’s economy over the past few months, but the government now faces a resulting housing bubble that it needs to contain without choking off growth, economists say.
Retail-sales growth is also expected to accelerate, to 10.7% in September from August’s 10.6%.
Both consumer and industrial prices seem to be gaining strength. The consumer price index likely rose 1.7% from a year earlier, quickening from a 1.3% year-over-year growth in August, the survey showed. The producer price index, a gauge of factory-gate prices that has been in deflationary territory for more than four years, likely dropped 0.2% from a year earlier in September, improving from a 0.8% year-over-year decline in August. Many economists polled expect China’s prolonged industrial deflation may finally come to an end this year.
The country’s trade surplus likely remained sizable, helping to offset impact from capital outflows. Outbound shipments likely dropped 3.2% year-over-year in September, extending August’s decline of 2.8%, according to the survey. Imports are expected to have fallen 1.0% from a year ago, compared with a 1.5% year-over-year decrease in August. That would bring China’s trade surplus to a $52.30 billion in September, largely unchanged from August’s $52.05 billion.
Michael Pettis is still forecasting a long reduction of China's debt relative to GDP and slowly rebalancing the economy to be more consumer driven. This will slow China's growth and reduce China's demand for new energy and metals.
Foreign real estate (in Hong Kong, Singapore, Vancouver, LA, San Francisco and other usual locations of interest to those staging out of the mainland) will still be attractive for the capital that is leaving China.
SOURCES- Reuters, Wall Street Journal