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          China lowers GDP target for quality growth

          Updated: 2012-03-12 14:49

          (Xinhua)

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          BEIJING – China has cut its GDP growth target to an eight-year low of 7.5 percent this year and made boosting consumer demand the first priority as the government looks to achieving long-term high quality development and putting economy on a sustainable track.

          Analysts believed that the lowered GDP target will create more leeway to rebalance China's economy and defuse price pressures in face of global turbulence and a pressing domestic demand for economic restructuring.

          China lowers GDP target for quality growth

          Graphic shows that China's GDP change from 2006 to 2011, delivered at the Fifth Session of the Eleventh National People's Congress on March 5, 2012. [Photo/Xinhua]

          Chinese Premier Wen Jiabao said in his government work report that by setting a slightly lower GDP growth rate, China hopes to achieve "higher-level, higher-quality development over a longer period of time.

          "Here I wish to stress that in setting a slightly lower GDP growth rate, we hope to make it fit with targets in the 12th Five-Year Plan, and to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development and making economic development more sustainable and efficient, so as to achieve higher-level, higher-quality development over a longer period of time," Premier Wen said at the opening of the annual parliamentary session March 5.

          China lowered its growth rate because "there are some overheating in certain sectors," and "there are some inflation pressure," the World Bank's Chief Economist Justin Yifu Lin said, adding that the slowdown is aimed at ensuring smooth economic growth in the long run.

          The lowered target is seen as realistic by the country's lawmakers and political advisors, as new pressure from home and abroad has put a brake on the country's growth. They believed that the change indicates China has started to prioritize the quality over the speed of its economic growth and this would benefit itself.

          The lowered target is in line with the theme of "making progress while maintaining stability" adopted at a central economic work conference in December, said Ye Qing, a local statistical official of central China's Hubei Province and a NPC deputy.

          The 7.5 percent growth target has sent the message that China will shift from speed-prone growth to quality-prone economic development, said Liu Shucheng from Chinese Academy of Social Sciences, and a CPPCC member.

          Taking into consideration of the changing environment, moderately lowering the growth target can make the local governments back away from excessively seeking growth speed, instead, put their emphasis on structural adjustment and improving efficiency, so as to leave much room for the transformation of economic growth mode, said Huang Hai, a CPPCC member and former assistant to Minister of Commerce.

          Echoing Huang's view, Chang Dechuan, NPC deputy and president of Qingdao Port Group Co. held that lowering growth target can provide more relax environment for economic transformation.

          “Instead of blindly pursuing large scale, enterprises should take innovation, energy conservation and environment protection as the guiding principle for development,” Chang added.

          There is no doubt that China needs to maintain some level of economic growth to sustain its development but the growth rate is not the ends. After 30 years of reform and opening up, people have more objective and more comprehensive view about economic growth rate.

          “Economic development, after all, is for the development of the people. So economic growth should benefit people's wellbeing,” Liu Rongxi, a NPC deputy from a grass-root community of Zibo city of Shandong Province, shared his opinion, stressing that improving people's livelihood should go hand in hand with economic growth.

          "A comparatively low economic growth rate will avoid heated inflation, leave enough room for improving energy efficiency, curbing pollution and restructuring development pattern," said Wu Angang, director of the Center for China Studies, Tsinghua University

          China still faces many difficulties and challenges internationally and domestically in economic and social development, according to Premier Wen.

          Domestically, Wen said, it has become more urgent and more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated, and unsustainable development.

          China's economy grew by 9.2 percent last year, down from 10.3 percent in 2010, with Europe in crisis and the U.S. recovery fragile, demand for Chinese exports is weakening.

          The International Monetary Fund has lowered its forecast for China's GDP growth this year to 8.2 percent from the 9 percent projected in September 2011.

          Zhuang Jian, a senior economist with Asian Development Bank, predicted that, based on experiences from previous years, the actual growth rate of China's GDP this year could be higher than the figure projected.

          Even the 7.5 percent growth target is still high compared with other countries, given that the major economic engines in the world, including the United States, the European Union and Japan, are either not functioning properly or recovering slowly, Zhuang said.

          A recent Reuters report said that China's acceptance of a slower rate of growth shows that the gradual rebalancing of the global economy long sought by world leaders is on track.

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