Wen lowers China growth target

Chinese Premier Wen Jiabao said the nation set a lower growth target for the period from 2011 through 2015 than in the previous five years as part of efforts to create a more sustainable economy.

The government set an economic growth target of 7 per cent for the so-called 12th five-year plan period, which covers 2011 through 2015, Wen said in response to online questions today on the website of the official Xinhua News Agency. China’s target was 7.5 per cent for the period from 2006 through last year, with actual growth exceeding that each year.

“We want to put the emphasis of our work on the quality and the benefits of economic growth,” Wen said. “We want the fruits of development to benefit the people.”

China has introduced initiatives to increase domestic consumption, make growth more energy efficient and encourage investment in poorer inland provinces after the economy more than doubled in the past five years as the wealth divide widened, pollution increased and gains in food and home prices accelerated. China can’t “blindly” pursue economic growth that is unsustainable, Wen said today.

The lower growth target is a signal “the government will probably be more aggressive towards controlling inflation,” said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB. “China is also increasingly serious about protecting the environment.”

China’s economy surpassed Japan’s to become the world’s second largest last year as the nation posted annual growth of 10.3 per cent and expansion at a 9.8 per cent pace in the fourth quarter. The Chinese economy passed Germany’s in 2007 and those of the United Kingdom and France in 2005.