China Sets 7.5% Growth Target for 2014 as Challenges Mount
Bloomberg News
China retained a target for 7.5 percent economic growth in 2014, signaling limits on the leadership's efforts to curb pollution and credit expansion in the world's second-largest economy.
The goal was given in a work report that Premier Li Keqiang will deliver to the annual meeting of the legislature today in Beijing. The inflation target is 3.5 percent.
Maintaining a pace of expansion close to last year's 7.7 percent would help sustain demand for oil and iron ore and support a global economy that's forecast by the International Monetary Fund to accelerate. At the same time, analysts from UBS AG to Societe Generale SA say a lower goal would've been more in keeping with the government's pledge to move away from growth at all costs.
'This is going to send a message to the market that the government will do whatever it takes to prevent growth from slowing down,' Yao Wei, China economist at Societe Generale in Hong Kong, said before the report. 'Whatever it takes means they wouldn't care so much about debt -- they'd even sacrifice reform progress to achieve that.'
Li's work report, which opens the annual meeting of the National People's Congress, is his first since the 58-year-old was named premier toward the end of last year's legislative gathering. He succeeded Wen Jiabao, 71, as part of the Communist Party's once-a-decade leadership handover.
China's ability to sustain its pace of growth in coming years will help determine the path of a global economy and emerging markets roiled by events including the U.S. Federal Reserve's tapering of monetary stimulus, turmoil in Ukraine and a currency devaluation in Argentina.
Li and President Xi Jinping are trying to balance clampdowns on credit and shadow banking, as well as the broadest economic-policy changes since the 1990s, with sustaining a 'reasonable' pace of expansion. Previous data this year in China have shown a slowdown in manufacturing, while trade and credit expansion exceeded estimates.
To contact Bloomberg News staff for this story: Xin Zhou in Beijing at xzhou68@bloomberg.net; Scott Lanman in Beijing at slanman@bloomberg.net
To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net
Post a Comment for "China Sets 7.5% Growth Target for 2014 as Challenges Mount"