After Beijing cut the country's growth target to an eight-year low, there have been suggestions that China is in retreat because of the US' sluggish economic recovery and dwindling European demand, but this sentiment reflects a short-term view, says an article on scmp.com. Excerpts:

Premier Wen Jiabao told the annual session of the National People's Congress that this year's growth target had been cut to 7.5 per cent in a bid to refocus the economy away from an unsustainable growth model.

The government's priorities this year will be to boost consumer demand through reducing the income gap and reduce reliance on external demand and capital investment

What is good for China in the long term will also be good for the world economy.

A lower target comes with a pledge to boost domestic consumption, a reform long sought by economic partners and economists concerned about economic imbalances. Stronger consumption in such a huge market can only benefit the global economy.

A reduced growth target that is sustainable is therefore not a bad thing. To maintain its rise, China needs to undertake drastic economic reforms.

Historically China's growth rates have been powered by exports and government spending, now, amid the fragile US economic recovery and with Europe casting a long shadow over future demand, there is the need for another engine of economic growth.

The necessary reforms could put the country on a healthier, more sustainable growth path.

(China Daily 03/08/2012 page10)