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Minimum growth rate set at 7 percent

By ZHENG YANGPENG | China Daily | Updated: 2013-09-17 09:03

For the first time since the beginning of China's complex economic transition, a government official said on Monday the minimum level of annual economic growth acceptable to the central government is 7 percent.

But based on recent economic data, for August in particular, China is almost certain to be able to achieve growth no lower than 7.5 percent in 2013, Yang Shubing, a senior official at the National Policy Research Office of the State Council, said at a news briefing.

Yang said that in coming years China will have to achieve minimum growth of 7 percent to double the size of the economy from 2010 to 2020, as promised at the 18th Communist Party of China National Congress last year.

Sheng Laiyun, a spokesman for the National Bureau of Statistics, said the government's minimum-growth tolerance level represents a comprehensive assessment of GDP growth and other factors like employment.

In a sign of the leadership's confidence in employment, Premier Li Keqiang disclosed in an article published last week in the Financial Times that in the first half of this year unemployment stood at around 5 percent, according to a survey.

The government earlier announced that registered urban unemployment had stood at 4.1 percent for a long period.

As for economic growth in 2013, Yang said electricity generation, a key indicator of the economy's vibrancy, rose for a fifth month in August and increased by 13.4 percent from a year ago.

Another key indicator, industrial output, grew at the fastest pace in 17 months in August, recording 10.4 percent year-on-year growth.

"Although after 30 years of fast economic expansion certain factors that used to support such rapid growth have faded away, such as the abundant supply of labor and inexpensive natural resources, China's fundamentals are unchanged," Sheng said.

Officials stressed that current reform measures target not only short-term growth, but also long-term sustained growth.

These measures include the newly announced Shanghai Free Trade Zone as well as streamlined administrative approval procedures.

Li told a group of domestic and foreign entrepreneurs at last week's "Summer Davos" in Dalian, Liaoning province, "An important agenda of economic reform is financial reform, which is a complicated project."

China needs not only courage, but also wisdom to initiate the reform that will develop into a tipping point with overall implications, he said.

Yang, responding to a China Daily question on the type of reform this will be, cited reform of the administrative system to redefine the government's role in the economy.

Liu Shengjun, deputy executive director of the China Europe International Business School's Lujiazui International Finance Research Center, said a feature of the premier's reform proposal is to withdraw the government from a range of areas and leave them to the market.

"He is confident of fulfilling China's economic transition through reform, rather than pump-priming," he said.

"Comparing Abenomics in Japan and Likonomics in China, you find the difference is that the essence of Abenomics is monetary and fiscal stimulus, while Li is refraining from stimulus," he said.

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