China: annual GDP growth target for the next 5 years is at 7%
2011-02-28 12:15 | Send to e-mail Send to facebook Send to twitter Send to Livejornal Send to Google Reader Send to Yandex Send to Yahoo bookmarks RSS analytics from the FBS company Print

Chinese premier Wen Jiabao announced that the economic-growth targets for the next 5 years are lower than the previous ones. China’s annual economic expansion target is set at 7% for the period from 2011 to 2015. From 2006 through 2010 the target was at 7.5%, with actual growth surpassing that each year and equal on average to 11.1%.

According to Wen, the main reason why China will target slower economic growth is its efforts to improve the quality of the growth and reduce inflationary pressures.

Analysts at Royal Bank of Canada note that it’s necessary to regard the new target as a signal of Beijing’s intentions over the medium term. In their view, during the past several years Chinese officials have underlined the need to move China away from a reliance on low-value-added and heavy-polluting export industries and to promote greater domestic consumption.

Wen also said that stronger yuan is in the interest of the country’s economy and people. However, yuan’s appreciation must be gradual because sharp gains of the currency would provoke bankruptcy of a number of Chinese enterprises. RBC economists note that although the comments on the currency revaluation were just a reiteration of what has been said before about gradual strengthening, Wen also made it clear that he sees the currency moving in only one direction.