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China sets growth target at 7.5% for third year running

Publication Date : 05-03-2014

 

China has set its growth target at 7.5 per cent this year for the third year running, leaving room for slower but quality growth as the country embarks on one of its most ambitious reforms in three decades.

The figure will be officially announced by Premier Li Keqiang later on Wednesday morning in his government work report when he opens the annual session of China's national Parliament.

The GDP target is viewed as a key signal on how serious the leadership is about carrying out reform as China overhauls its economy from a growth-at-all-costs model that has devastated the environment to a quality-driven one, as well as an indicator of how fiscal and monetary policy may fare in the coming year.

This marks the third consecutive year for the world's second-largest economy to target growth at 7.5 per cent. In 2012, the government cut the forecast rate for the first time in eight years from a longstanding annual goal of 8 per cent.

While the 7.5 per cent target does not come as a surprise, some analysts had predicted a further lowering of the target to 7 per cent - what Beijing sees as the bottom line for tolerance of an economic slowdown - as it would have been more consistent with the pains that come with China's longer-term development plan. A 7 per cent target would be China's lowest in a decade.

Beijing has repeatedly said it would accept slower growth as it tries to wean the economy off dependence on investment and exports in favour of domestic consumption, but such rebalancing has been proceeding gradually.

Since he took power in November 2012, however, President Xi Jinping has been revamping local officials' performance criteria to focus their efforts on the quality of growth, while taking steps to curb China's burgeoning debt problem before it triggers a financial crisis.

Inflation level was also kept at 3.5 per cent.

 

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