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Business / Opinion

GDP target tallies with China's reality

By Xin Zhiming (chinadaily.com.cn) Updated: 2014-03-05 15:35

China has set its GDP growth target at 7.5 percent for 2014, which testifies to a more mature mentality toward how to properly manage the world's second-largest economy.

The target remains unchanged from that for 2013 and is slightly lower than the real year-on-year growth of 7.7 percent in 2013.

While it reflects the caution of the Chinese policymakers in maintaining a stable growth amid domestic and international economic uncertainties, such a seemingly low target also shows their clear consciousness as to how to well balance growth, employment and inflation after the Chinese economy galloped at a fast pace for about thirty years.

GDP target tallies with China's reality

GDP target tallies with China's reality

At its peak, the Chinese economy expanded at more than 10 percent annually. But problems have ensued, such as environmental degradation and excessive consumption of energy and resources.

The top priority, therefore, is economic restructuring and reform, which will make growth of the Chinese economy more sustainable.

As Premier Li Keqiang has said, in the latest cycle of economic downturn, China has avoided making short-term, large-scale monetary stimulus to achieve a good-looking growth figure. Instead, it has sought to increase effective supply and unleash potential domestic demand to keep the economy within a reasonable growth band.

Analysts estimate that 7-8 percent could be a comfortable zone for the Chinese economy. Higher growth could lead to the problem of insustainability while a lower rate would put employment rate at stake.

Despite the many challenges in 2013, such as the money crunch in June and the international turbulences caused by the US tapering of its quantitative easing program, China has successfully kept its economy on orbit while managing to stabilize employment and reduce inflation to a relatively low level.

Such an art of balance, which is an integral part of the so-called Likonomics, is well reflected in the reasonable growth target for this year that Premier Li announced as he delivered his government work report at the opening of the annual session of the National People's Congress, China's top legislature, on Wednesday.

Reaching that target would not only add to China's economic vitality and stability, but also prove a boon to the crisis-laden world economy.

The US and European economies are showing initial signs of recovering, but the momentum remains weak and the road remains bumpy. China's success in accomplishing its growth target, therefore, is crucial in maintaining stable global growth and helps prevent new crises from happening.

 

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