China’s 2014 7.5 Percent GDP Target In Jeopady

The sluggish start has led many economists to downgrade their forecasts, and some think Beijing may not be able to meet its 7.5% GDP growth target for 2014.
In the past, policymakers might have responded by pushing cheap credit into the economy and pursuing other quick fixes to boost growth.
But Beijing has started a series of market-oriented reforms that include a crackdown on the shadow banking sector and runaway local government debt. Another sugar high of easy credit would endanger those initiatives.
Related story: China’s rich make plans to avoid smog
Market participants believe growth will be allowed to slow. Eighty-four percent of investors expect GDP will expand by less than 7.5% this year, according to a survey by Barclays (BCS). Respondents rank weak growth in China as their biggest worry, ahead of geopolitical concerns and changes to the Fed’s stimulus program.
In a sign that policymakers might seek to exhaust other options before pursuing major stimulus measures, Premier Li Keqiang indicated this month that Beijing is placing less emphasis on hitting a specific GDP target — a measurement long used to gauge the performance of local and provincial officials.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza