Even as the government's 7.5 percent growth target for this year
looks increasingly secure, some advisors think it may not issue a
specific target for 2014 in order to have more room to pursue
reforms intended to lead to more sustainable growth.
The government has repeatedly said it has the appetite to overhaul
the world's second-largest economy, and last month outlined an
ambitious agenda for the next decade, but it has also shown a
distaste for growth slowing towards 7 percent.
Top government think tanks, which make policy proposals, were still
debating whether the growth target should be cut to 7 percent in
2014 from this year's 7.5 percent as the leadership convened in
Beijing for the Central Economic Work Conference.
Zhao Xijun, deputy head of the Finance and Securities Institute at
Renmin University in Beijing, said he had proposed to the government
that it set a range of 7-7.5 percent, but saw an outside chance that
Beijing simply scrapped the target.
"It's even better not to announce a target, otherwise you strengthen
the importance of GDP," Zhao said, adding that the government could
simply stress economic stability for next year.
The annual conference brings together top party leaders, ministers
and provincial officials to set economic targets for the year ahead,
which will be unveiled in parliament next March, according to
government economists familiar with the meetings.
High on the agenda this year is a detailed reform plan for 2014
after the Communist Party last month unveiled sweeping economic and
social changes, including relaxing the country's one-child policy
and liberalizing financial markets.
Economists expect priorities to include preparations for freeing up
bank deposit rates and experimenting with greater yuan
convertibility in a new free-trade zone in Shanghai.
Already this week, new standards have been issued for local
officials. Their performance will no longer be based simply on their
region's growth rate, but will include resource and environmental
costs, debt levels and work safety.
Promotions will also depend on how officials boost technological
innovation, employment, household incomes and social security, the
central organization department said.
The overall intention is to restructure China's economy so it is
driven by consumption and services, as is the case in Western
economies, rather than by exports and investment.
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SPLIT ON TARGET
The push for reform means growth will be slower — something leaders
have said they are comfortable with as it will lead to more
sustainable growth.
But as a protracted slowdown extended into the first half of 2013
and analysts questioned whether the growth target would be missed,
the government stepped in to shore up activity.
That saw growth pick up in the third quarter, and many analysts had
expected that to taper into year-end. However, data on Tuesday
showed retail sales, industrial output and investment maintaining
their annual growth rates in November.
That followed figures showing a strong jump in exports and a run of
surveys of factory and service sector activity suggesting the
pick-up since mid-year has been sustained.
"The economy is humming along and there is no need for growth
upgrades or growth downgrades. They can focus on what they need to
focus on, with no need to worry about growth stabilization
policies," said Tim Condon, Asia economist at ING in Singapore.
Last month, Premier Li Keqiang said economic growth of 7.2 percent
was needed to keep a lid on unemployment, and on Monday the official
China Securities Journal said the government was likely to stick
with this year's 7.5 percent target for 2014.
The State Information Centre and the Chinese Academy of Social
Sciences have proposed lowering the growth target for 2014, arguing
it would help Beijing focus on reforms, but other think tanks, such
as China Centre for International Economic Exchanges (CCIEE), have
proposed keeping the current target.
"The difference on growth target remains big," Wang Jun, senior
economist at the CCIEE, told Reuters. As a compromise, the
government may consider setting a growth range of 7-7.5 percent for
next year, he said.
Government economists also think the government will target 3.5
percent inflation, 13 percent broad money supply growth and 20
percent growth in fixed-asset investment for 2014.
(Additional reporting by Koh Gui Qing and Aileen Wang;
editing by
John Mair)
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