Asia-Pacific News

China lowers economic growth target

Mar 5, 2012, 3:27 GMT

Beijing - Premier Wen Jiabao on Monday set a lower target of 7.5 per cent for China's economic expansion this year, saying the country had been affected by global financial woes but would promote domestic consumption to offset flagging export growth.

Wen said the lower target for economic growth was part of China's strategy for 'accelerating the transformation of the pattern of economic development and making (it) more sustainable and efficient.'

The government hoped to limit consumer inflation to about 4 per cent this year, he said at the opening of the 10-day annual session of the ruling Communist Party's nominal state parliament, the National People's Congress (NPC).

China's foreign trade was expected to grow by about 10 per cent this year, he said, less than half of last year's growth of 22.5 per cent.

Analysts have forecast China's gross domestic product to expand by a maximum of 8.5 per cent this year, continuing a downward trend from 10.4 per cent in 2010 to 9.2 per cent in 2011.

In his two-hour speech, Wen delivered a government work report on 2011 and outlined key economic policies for this year.

'Last year, China faced a complex and volatile political and economic environment abroad and challenging reform and development tasks at home,' he said.

He said his government would follow a 'cautious but flexible' course in monetary policy in order to protect the country from financial risks.

'We aim to promote steady and robust economic development, keep prices stable, and guard against financial risks by keeping the total money and credit supply at an appropriate level,' Wen said.

The meeting was expected to focus on the party's measures to control inflation, spread the benefits of development to rural areas and promote social stability.

President Hu Jintao and other party leaders were among some 3,000 NPC delegates who heard Wen's opening speech.

'The most important thing now is people's livelihood,' said a congress delegate from Hong Kong. 'China has already had external influence (from global economic problems),' he said.

Wen said the government wanted to build more affordable housing and 'bring property prices down to a reasonable level.'

It would improve 'social management' to resolve local conflicts and 'intensively promote development of the system of core socialist values,' he said.

The Ministry of Finance's budget report to the congress set a deficit of about 1.5 per cent of gross domestic product this year, or 800 billion yuan (127 billion), down from a budgeted deficit of about 2 per cent last year.

Total expenditure was budgeted at 12.43 trillion yuan (1.97 trillion dollars) with expected revenue of 11.36 trillion yuan this year, the report said.

It said planned spending on 'public security' - including courts and prisons - would rise by 11.5 per cent to 701.8 billion yuan (111.4 billion dollars) this year.

Congress spokesman Li Zhaoxing on Sunday said China also planned a 'reasonable and appropriate' increase of 11.2 per cent in its military budget, following similar increases in recent years.

'Strong national defence and powerful armed forces provide a firm guarantee for safeguarding China's sovereignty, security and development interests,' Wen said in his speech.

Some 2,000 members of the Chinese People's Political Consultative Conference, an advisory body that makes recommendations to the NPC, hundreds of journalists and observers, and a military brass band also attended the opening of the congress.

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