Chinese customers browse products at the opening of a new Apple store in Dalian, China's Liaoning province on October 24, 2015. US technology giant Apple will keep investing in China despite slowing growth in the world's second-largest economy, chief executive Tim Cook said, as the company prepares to open its newest store in the mainland.          CHINA OUT      AFP PHOTO

BEIJING: China will be able to keep annual economic growth at around 6-7 percent over the next three to five years, a top People’s Bank of China (PBOC) policymaker said yesterday, a day after the bank cut interest rates for the sixth time in less than a year. The comments from Yi Gang, vice governor of the People’s Bank of China, appeared to be aimed at reassuring investors this level of growth, China’s slowest pace in two decades but still faster than other major economies, is the Chinese economy’s “new normal”.

“China’s future economic growth will still be relatively quick. Around seven, six-point-something. These will all be very normal,” he told a conference in Beijing. As well as cutting interest rates on Friday, the PBOC lowered the amount of cash that banks must hold as reserves. Both moves were bids to jumpstart growth in China’s slowing economy, a drag on global growth that has been of major concern in emerging markets and other leading economies.

Monetary policy easing in the world’s second-largest economy is at its most aggressive since the 2008/09 financial crisis, as growth looks set to slip to a 25-year-low this year of under 7 percent. Yi said China in the future would lower the reserve requirement ratio for banks, the amount of cash that major lenders need to keep on hand – at a “normal” pace. “Our reserve requirement ratio is still at a relatively high level so there is still room to lower the RRR. In future, we will proceed to lower the RRR at a normal pace,” he said.

Yi said the PBOC planned to keep interest rates at a reasonable level to reduce the corporate debt burden, and noted that interest rate liberalization does not mean that the central bank would reduce regulation of rates. China will also continue to set benchmark lending and deposit rates for some time, he said, but these rates would not restrict market pricing. Data released on Monday showed China’s economy in the July-to-September quarter grew 6.9 percent from a year earlier, dipping below 7 percent for the first time since the global financial crisis.

Yi noted that China’s stock market, which has fallen sharply since June, had completed most of its adjustments and that the yuan, which was buffeted in the wake of a surprise devaluation in early August, had “basically” stabilized. “Following Aug. 11, our original intention was to pursue market reforms. But after that, we realized there was a relatively big depreciation pressure (on the yuan), and so we decided to resolutely stabilize the yuan,” he said.

The PBOC was looking into leverage levels in the debt market, Yi noted. He said that China did not have exceptionally high debt levels, and while the bank was not overly anxious about cutting the level of leverage in the economy, the overall strategy is to stabilize leverage levels. “I want to especially mention this: I am now also focused on the leverage level in China’s debt market,” he said. – Reuters