Mon, Mar 18, 2013 - Page 15 News List

China’s Li targeting 7.5% growth

GROWING PAINS:As China moves from a reliance on exports to a consumption-based economy, its new premier will need to be aware of growth expectations

Bloomberg

Chinese Premier Li Keqiang (李克強) said the nation must maintain economic growth averaging 7.5 percent a year through 2020, as the country seeks to double per-capita income this decade.

“We need to maintain steady economic growth, prevent inflation and control latent risks so that there won’t be big fluctuations in economic performance,” Li told reporters at Beijing’s Great Hall of the People yesterday.

“That will not be easy, but we have favorable conditions in place and enormous potential in domestic demand,” he said.

Li, 57, who took office on Friday, pledged to move some of the state’s tasks to markets and trim government bureaucracy, while reducing environmental harm and pollution. State media transcripts that said Li discussed 7 percent growth were at odds with his spoken remarks. The government’s five-year plan through 2015 calls for a 7 percent pace.

Either way, leaders are signaling they are unwilling to tolerate expansion much slower than last year’s 7.8 percent, a 13-year low, as they try to rely more on consumption, and less on exports and investment.

The economy expanded at an average annual rate of 10.4 percent from 2001 through 2011. In his final annual report delivered on March 5, then-premier Wen Jiabao (溫家寶) called China’s growth model “unbalanced, uncoordinated and unsustainable.”

The government’s five-year plan in 2011 envisioned pushing the economy to a more consumption-focused development path. In the first two months of this year, the economy has moved back toward the old growth pattern. China’s exports showed the biggest January to February gain since 2010 and fixed-asset investment accelerated, while retail sales slowed.

Wen’s report set a 7.5 percent goal for expansion for this year, the same target as last year. He called for China to “accelerate the change of the growth model” and “unswervingly take expanding domestic demand as our long-term strategy for economic development.”

At the 18th National Congress of the Chinese Communist Party last November that inaugurated the leadership transition, then-president Hu Jintao (胡錦濤) set the target of doubling China’s per-capita income by 2020. The goal implied growth of 7 percent from this year to 2020, Citigroup Inc said at the time.

Li, at yesterday’s press briefing, also vowed to fight against government graft, cut regulations and bureaucracy to give more room for market forces, and expand economic opportunities for more of China’s 1.35 billion people. He said the continued urbanization of the country would stoke further consumption and investment.

“We need to work to create equal opportunities for everyone,” Li said. Creating a “level playing field” will mean China’s people can “taste success.”

He said China would continue to overhaul its interest rate and exchange rate systems.

Yesterday, speaking at the close of the parliament’s session, Xi Jinping (習近平) said the government and party had to “resolutely fight against corruption.”

“We must make sure that power will be exercised in an open and transparent fashion, so that the people can supervise government more fully and more effectively,” Li said.

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