China sets 2015 growth target at ‘around 7%’

China has set its gross domestic product (GDP) growth target at “around 7 percent” for 2015 – the lowest in 11 years – focusing on quality over quantity as it overhauls its growth model.

The target, which Premier Li Keqiang announced as the annual National People’s Congress got under way on Thursday, is in line with market expectations and marks a sharp decline from last year’s 7.5 percent target.

China’s economy grew at its slowest pace in 24 years in 2014, undershooting the government’s target for the first time since 1998. GDP expanded 7.4 percent last year from 7.7 percent in 2013.

“The deep growth target reduction is probably to manage the expectations of its people and the global community. It also signals that the bottoming-out of China is still nowhere in sight,” Howie Lee, investment analyst at Phillip Futures wrote in a note.

Economists say the lower growth target means the People’s Bank of China is no longer as hard pressed to unleash monetary stimulus.

“With a 7 percent growth target, there’s less scope for monetary easing,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole told CNBC.

CNBC

 

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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