China is poised to unveil its official economic growth target of 7 percent for 2015 when its parliament meets next month, according to a report from Reuters last week, citing policy insiders.
As China adjusts to a “new normal” of slower but more sustainable growth, a 7 percent economic growth target is seen as a floor, or the minimum growth that the nation needs in order to fend off deflation and to keep employment strong enough so that it can push on with key reforms, Reuters reports.
Chinese policymakers are prepared to slash interest rates, increase liquidity, and accept some currency weakness to ensure that the nation achieves economic growth of 7 percent in 2015, according to Reuters.
As Reuters reports:
The government aims to put the economy on a more sustainable footing over time by encouraging capital away from state enterprises and into the more efficient private sector, reforming the fiscal system and liberalizing interest rates, but such changes could slow growth in the short term.
China must guarantee a “bottom line” of 6.5 percent annual economic growth for its 13th five-year-plan, the China Securities Journal quoted the director of China’s National Development and Reform Commission (NDRC) Department of Planning, Xu Lin as saying, Reuters reported on Sunday.
This would mark the lowest annual growth rate in China since 1990.
In 2014, China’s economic growth expanded by 7.4 percent, its slowest rate in 24 years.