"The ultimate decision appears to have been that Beijing cannot reform without a certain level of growth," they wrote.īut this year's report sets out the difficulties of reaching the target more clearly, warning that "deep-seated problems are surfacing painful structural adjustments need to be made the pace of economic growth is changing".Īrthur Kroeber, head of research at Gavekal Dragonomics, said the government had made it clear that stimulus was not part of its programme. Li Wei and Stephen Green of Standard Chartered said some reformers had pushed for a target of 7%-7.5%. "That means the debt risk is only going to rise," she added.Ĭhina recorded 7.7% growth last year, but analysts say that level will be harder to achieve this year. She said if the government decided to shore up slowing growth it would resort to the old methods: infrastructure investment and faster credit growth. "Although the reforms are good in the long run, in the short term they're more likely to be negative for growth, so this target creates even more uncertainty." Yao Wei, China economist for Societe Generale, cautioned: "They have promised to do all these things – speed up reform, fight pollution and manage debt risk – yet at the same time want to reach the same growth target as last year. Under President Xi Jinping, the leadership has been bolder in setting out a reform agenda after years of slow progress on promises to set the economy on a sustainable path. While the meeting opened under blue skies in Beijing, official statistics showed that much of the year has been blighted by smog.
Years of double-digit growth, driven by exports and investment, helped millions climb out of poverty but has led to social and environmental problems.
Amost 3,000 delegates at the Great Hall of the People observed a minute's silence for victims of Saturday's terrorist attack in Kunming as the meeting began. Li was addressing the opening session of the National People's Congress (NPC), the largely rubber-stamp parliament that meets annually in Beijing. He described pollution as "nature's red-light warning against the model of inefficient and blind development", underscoring the broader message that China must not only shut down coal-fired furnaces, but shift to a different kind of development. Li Keqiang said reform was the top priority as he set out his first annual policy report since becoming premier of the world's second largest economy, but soothed anxieties about the impact by maintaining a 7.5% growth target. China will declare war on pollution, as part of a commitment to overhauling its unsustainable economic model, the country's premier said.
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