BEIJING - China has set its growth target at about 7 per cent this year - the lowest in more than a decade - as Beijing signals its commitment to a “new normal” of slower but better quality growth, according to official news agency Xinhua.
The downward adjustment, expected to be announced by Premier Li Keqiang on Thursday morning in his government work report as he opens the annual session of China’s legislative body, the National People’s Congress, was widely anticipated.
Last year, China missed it growth target of 7.5 per cent for the first time since 1998, registering an economic expansion of 7.4 per cent - the weakest in 24 years as the world’s No. 2 economy struggled with a property slump and deflationary pressures.
Economists like Ms Wang Tao from UBS said more weights are likely to be put on “the quality of development (this year), which is characterised by more balanced and sustainable economic structure, better income distribution and less damage to the environment”.
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.
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.
Mr Li is also expected to keep the target of new urban job creation at over 10 million.