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Thursday, March 5, 2015, 10:36

China pares GDP target to 7%


China pares GDP target to 7%
Chinese Premier Li Keqiang delivers the work report during the opening session of the National People's Congress at the Great Hall of the People in Beijing, March 5, 2015. (Photo / Xinhua)

BEIJING - Premier Li Keqiang on Thursday warned "formidable difficulty" in 2015, setting a slower growth target, but stressed his confidence in the ongoing reform to start new development engines.

The annual government work report, delivered by Li at the opening meeting of the national legislature's annual session, set this year's economic growth target at 7 percent, lower than last year's target and the 7.4-percent actual growth in 2014.

Other economic indices such as consumer price index (CPI), set at 3 percent, and unemployment rate at 4.5 percent are also slightly lower than last year.

Predicting the situation in 2015, the Premier admitted that the difficulties China is to face may be "even more formidable" than last year.

However, Li said he is "fully confident" as China's development has enormous potential and is hugely resilient, with ample room for growth.

The Premier stressed that the growth rate is "both aligned with our goal of finishing building a moderately prosperous society in all respects and is appropriate in terms of the need to grow and upgrade our economy."

Considering the size of China's economy, gross domestic product (GDP) worth of 63.6 trillion yuan (US$10.39 trillion) in 2014, even the growth of 7 percent will produce an annual increase of more than US$800 billion at current price, larger than the figure produced by a 10-percent growth five years ago, said Fan Jianping, chief economist for the government think-tank State Information Center of China.

China pares GDP target to 7%

The 3rd session of 12th National People's Congress (NPC), China's national legislature, opens its annual session at the Great Hall of the People in Beijing, March 5, 2015. (Photo / Xinhua)

The report highlighted "dual objectives" of maintaining a medium-to-high level of growth rate and moving toward a medium-to-high level of development.

It was the first time that an important official document features the double "medium-to-highs."

As for how to realize the goals, the solution presented in Li' s report is dubbed "twin engines", which refers to popular entrepreneurship and innovation and increased supply of public goods and services.

"Let us rally closely around the Party Central Committee with Comrade Xi Jinping as General Secretary, hold high the great banner of socialism with Chinese characteristics, and work together to break new ground," the report reads towards the end.

The year of 2015 is considered a key one to realize the overall reform blueprint set by the leadership in 2013 and the first year since the legal reform plan last October that aims to realize the rule of law in China.

It is also the last year for the government to meet the targets set by the country's 12th five-year national development plan, which range from people's livelihood to pollution control.

The government also announced a 10.1-percent rise in its national defense budget in 2015, the lowest growth in five years as the country confronts mounting pressure in the face of an economic slowdown.

According to a budget report released shortly before the country's top legislature starts its annual session, the government plans to raise defense budget to 886.9 billion yuan (about US$144.2 billion).

China also aims to hold this year's rise in the consumer price index (CPI) at around 3 percent.

The goal is lower than the target of around 3.5 percent in 2014. The CPI, a main gauge of inflation pressure, rose 2 percent in 2014 year on year.

In a boost to foreign investment, China will halve the number of industries in which foreign investment is restricted.

The government also aims to create more than 10 million urban jobs and ensure that the registered urban unemployment rate does not rise above 4.5 percent in 2015.

It will continue to implement proactive fiscal policy and prudent monetary policy in 2015, while noting policy flexibility to sustain economic growth

China's broad money supply (M2), which covers cash in circulation and all deposits, is forecast to grow by around 12 percent in 2015.

China will raise its budget deficit to 2.3 percent of gross domestic product (GDP) for 2015. It aims to increase its imports and exports by around 6 percent.

The growth rate is lower than the target of around 7.5 percent set last year. Hit by waning global market demand, China's imports and exports rose by a mere 2.3 percent in 2014.

Nearly 3,000 NPC deputies from across the country attended the opening meeting along with top Party and state leaders Xi Jinping, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli. The meeting was presided over by Zhang Dejiang, chairman of the National People's Congress (NPC) Standing Committee.


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