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2013-03-05 12:00:11
China has left its economic growth target for the year unchanged at 7.5%, as it
looks to expand at a steady pace and maintain social stability.
The country also set a lower inflation goal of 3.5%, aimed at keeping prices in
check.
The forecast was outlined by Premier Wen Jiabao in his last appearance at
China's annual parliamentary session.
The world's second-largest economy has seen expansion slide after a slowdown
domestically and in key markets.
The National People's Congress will seal China's leadership handover, with the
new president and premier to be formally named.
Hard work
After years of experiencing a blistering pace of growth, China has seen its
economic expansion slow.
In 2012, the country grew at a pace of 7.8%, its weakest performance in 13
years.
This is a cause for concern not only domestically, where analysts say a fast
pace of growth is needed to create jobs, but also for the rest of the world
which relies partly on China to drive the global economy.
Start Quote
We should energetically change the growth model
Wen Jiabao Premier
But China, in turn, is dependent on key markets such as the US and Europe
buying its goods. Weakness in those economies has led to a drop in demand.
"We deem it necessary and appropriate to set this year's target for economic
growth at about 7.5%, a goal that we will have to work hard to attain," said Mr
Wen. China regularly exceeds the growth target set by Beijing for the year.
Analysts said a further slowing is expected.
"The Chinese economy will decelerate from the second quarter, but the slowdown
is not significant enough to derail the economic recovery," said Dariusz
Kowalczyk, from Credit Agricole CIB in Hong Kong.
"The 7.5% growth target announced today is safe," he added.
Mr Wen also spoke of transforming China's economy to one less dependent on
exports by boosting domestic spending.
"We should energetically change the growth model," he said, something the
country has been trying to achieve for many years.
Rising prices?
China has also struggled to maintain a fast pace of growth, but keep prices of
consumer goods and property affordable.
Clothing factory in Huaibei, central China's Anhui province China grew 7.8% in
2012, its weakest pace of growth in 13 years
The property market has seen prices sky-rocket in part because of domestic
pressures, but also because of investment flowing into China from developed
countries who have been increasing liquidity in their economies.
Analysts feared that asset bubbles were forming in the Chinese economy.
Mr Wen said prices were at risk of rising again this year.
"There are relatively big inflationary pressures this year, mainly because
there are pressures on China's land, labour, agricultural products and
services. And major countries are stepping up loose monetary policy, so we
can't overlook imported inflationary pressures."
He also promised that more affordable housing would be made available,
something ordinary Chinese people complain about on social networking sites.
"This year we will basically finish construction of 4.7 million units of
affordable housing, and start building 6.3 million units," he said.
Last week Beijing announced more steps to cool the property market.