China annual economic meet begins in Beijing
December 9, 2014, 4:33 am

File photo of the 18th Central Committee of the Communist Party of China (CPC) in Beijing, capital of China [Xinhua]

The annual meet will review China’s economic progress in 2014 and list major tasks for 2015.

China is likely to set a growth target of 7 per cent for the next year.

The government last cut its annual growth target in 2012, to 7.5 per cent from eight percent that it had kept for eight years.

Chinese President Xi Jinping has already said a growth rate around 7 per cent would still make the country a top performer.

The Chinese President has asserted the nation needs to adapt to a “new normal” in the pace of economic growth and remain “cool-minded” amid a slowdown from double-digit growth.

China’s growth rate decelerated to 7.7 per cent in 2012 and 2013, and in the first three quarters of 2014, the figure further declined to 7.4 per cent.

Chinese economists Li Yining and Wu Jinglian say the pattern of “high speed with huge investment” should be abandoned.

“China should bid farewell to excessively fast expansion with annual growth around 10 per cent,” Li said.

Wu said the stimulus package of 4 trillion yuan and 10 trillion yuan loans in 2009 only triggered a three quarters of growth over 10 per cent, and is not a sustainable plan.

“Economic declines are inevitable,” he stressed, “the medium-speed economic ‘new normal’ is more efficient than any previous policy stimulus.”

The Chinese government is weaning the economy from a dependence on exports and infrastructure and making domestic consumption the key growth engine.

Bloomberg economists forecast Xi’s crackdown against corruption launched in 2014 will boost gross domestic product growth by 0.1 to 0.5 percentage point in 2020, resulting in a dividend of as much as about $70 billion in today’s dollar terms.

During the APEC Summit in Beijing last month, Xi said outbound investment from China will total $1.25 trillion over the next 10 years, 500 million Chinese tourists will go abroad, and the government will spend $40 billion to revive the ancient Silk Road trade route between Asia and Europe.

The 21-member APEC, which includes Russia, China, US, Japan, South Korea, Indonesia and Canada have formally launched the mammoth China-backed Asia Pacific FTA negotiations last month despite reported opposition from the US.

The FTA, if implemented, will add an estimated $2.4 trillion to the global economy, says a new survey by Pacific Economic Cooperation Council (PECC).

TBP