China shrunk the nation’s economic growth target to 7.5 percent from an 8 percent goal appropriately since 2005. It may be a signal that leaders are determined to decrease reliance on exports and capital spending and helping for consumption.
Officials will also aim at inflation of about 4 percent this year, unchanged from the 2011 goal, according to a state- of-the-nation speech that Premier Wen Jiabao delivered to about 3,000 lawmakers at the annual meeting of the National People’s Congress in Beijing today.
Asian stocks dropped as Wen, 69, said the nation needs to shift to a more affordable and efficient economic model and achieve “higher-quality development over a longer period of time.” China must boost the incomes of ordinary people, countless on exports and investment and reduce the state’s role in favor of private enterprise, Zong Qinghou, the country’s second- richest man, said in a March 3 interview.
The gross domestic product target should be read as the lower bound of the government’s “comfort zone,” said Michael Buchanan, chief Asia-Pacific economist at Goldman Sachs Group Inc. in Hong Kong. “It can also be viewed as a gesture from the central government that local governments should not focus solely” on the pace of expansion.