Chinese Leaders Accept New Normal of Slow Growth

Chinese leaders have affirmed their commitment to a “new normal” of slower economic growth next year and promised to promote market-oriented reforms and help the poor.

An official statement Friday following an annual planning meeting led by President Xi Jinping gave no growth target for 2015. But private sector economists expect it to be lowered to 7 percent from the 7.5 percent level of recent years.

The statement listed five goals, including keeping the economy stable and finding new sources of growth, making industry more efficient, speeding up agricultural development and raising incomes. It warned China faces “downward pressure” on growth due to weak global demand and “increasing difficulties for business.”

The plan is the latest stage in efforts by communist leaders to steer the world’s second-largest economy to more sustainable, environmentally friendly growth based on domestic consumption and technology instead of trade and investment.

Growth tumbled to a five-year low of 7.3 percent in the quarter ending in September, barely half the 14.2 percent high of 2007. Chinese leaders have expressed confidence they can manage the slowdown but, in a sign they might worry it is deepening too sharply, unexpectedly cut interest rates Nov. 22 in an effort to prop up growth.

via Mainichi

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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