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UPDATE 1-China economy on track to hit 2017 growth target -state planner

* China set to meet 6.5 pct GDP growth target -NDRC head

* Country cuts steel capacity by 110 mln T in past 5 yrs

* On target to create 13 mln new urban jobs in 2017 (Adds detail)

BEIJING, Oct 21 (Reuters) - China's economy is on track to meet the official growth target for 2017, the head of the state planning agency said on Saturday.

"We expect to achieve the full-year growth target of about 6.5 percent," He Lifeng, chairman of the National Development and Reform Commission (NDRC), told a briefing on the sidelines of China's Communist Party Congress.

Most economists believe China's actual growth should easily beat the target. The economy grew 6.8 percent in the third quarter of the year, and 6.9 percent in the first half. Last year's growth rate of 6.7 percent was a 26-year low.

China's economy has surprised global markets and investors with robust growth so far this year, driven by stronger demand from Europe and the United States and a renaissance in long-ailing "smokestack" industries such as steel.

The world's second-largest economy has been undergoing a restructuring process designed to "upgrade" its heavy industrial economy, cut pollution and tackle profit-sapping capacity gluts in sectors like steel and coal.

Chairman He said China cut annual crude steel capacity by as much as 110 million tonnes over the last five years, with coal capacity slashed by as much as 400 million tonnes.

The state had to find new jobs for as many as 1.1 million workers from the two industries over the period, he said.

China promised last year to cut steel capacity by as much as 150 million tonnes over the 2016-2020 period, with coal set to shed another 500 million tonnes of annual output capacity.

China was also on track to meet its target to find 13 million new urban jobs over the course of this year, He said.

(Reporting by Kevin You and Meng Meng; Writing by David Stanway; Editing by Kim Coghill and Tom Hogue)