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Business / Economy

China lowers 2015 economic growth target to around 7%

(Xinhua) Updated: 2015-03-05 13:33

BEIJING -- China targeted economic growth of approximately 7 percent in 2015, lower than the goal of around 7.5 percent in 2014, according to a government work report delivered by Premier Li Keqiang at the parliament's annual session Thursday.

The growth target for 2015 is also lower than the 7.4-percent economic growth rate registered in 2014, its weakest annual expansion since 1990.

"Over the past year, the international and domestic environments faced by China in its development have been complicated and challenging. The road to global economic recovery has been rough, with many ups and downs, and the performance of the major economies has been divergent," Li said.

"Downward pressure on China's economy has continued to mount, and we have faced an array of interwoven difficulties and challenges," he added.

In the 35 years between 1978 and 2013, annual growth of the Chinese economy averaged close to 10 percent. However, the "good old days" had to end, with growth decelerating to 7.7 percent in 2012 and 2013.

The target growth rate of approximately 7 percent "takes into consideration what is needed and what is possible. This target is both aligned with our goal of finishing building a moderately prosperous society in all respects and is appropriate in terms of the need to grow and upgrade our economy," Li said.

"If China's economy can grow at this rate for a relatively long time, we will secure a more solid material foundation for modernization," he added.

To aid the economic growth, China will continue to implement a proactive fiscal policy and prudent monetary policy this year, while noting policy flexibility.

Stressing the proactive fiscal policy will serve to "sustain the momentum of economic growth and increase economic returns," the country will raise its budget deficit to 2.3 percent of its gross domestic product (GDP) for 2015, up from last year's target of 2.1 percent.

China will also invest more than 800 billion yuan ($130 billion) in railway construction this year, and meanwhile, the investment in the major water conservancy projects under construction will exceed 800 billion yuan this year.

The broad money supply, or M2, is forecast to grow by around 12 percent this year, lower than the target of around 13 percent of 2014, but the actual money supply may be "slightly higher than this projection depending on the needs of economic development," noted the report.

"The aim of maintaining stable growth is to ensure employment. As the service sector becomes larger, the number of small and micro businesses grows, and the economy gains in size, a growth rate of approximately 7 percent will ensure ample employment," Li said.

China aims to create more than 10 million urban jobs and ensure that the registered urban unemployment rate does not rise above 4.5 percent in 2015.

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