China’s official Xinhua News Agency corrected a report that cited Finance Minister Lou Jiwei as saying the country’s growth target this year is 7 percent, a figure lower than the official goal of 7.5 percent set in March.
In an English-language story released yesterday and dated July 12, Xinhua said it corrected a quote attributed to Lou to “there is no doubt that China can achieve this year’s growth target of 7.5 percent” from its original story dated July 11 that cited him as saying “there is no doubt that China can achieve the growth target, though the 7 percent goal should not be considered as the bottom line.”
Xinhua’s correction of Lou’s comments may indicate the government is seeking to avoid diminishing confidence in the country’s economic outlook already shaken by sliding exports and a cash crunch. President Xi Jinping and Premier Li Keqiang, grappling with the prospect of the weakest increase in gross domestic product in 23 years, have indicated they will tolerate slower growth to focus on policy changes to create more sustainable expansion.
Major official newspapers including the Communist Party mouthpiece People’s Daily, China Securities Journal, Shanghai Securities News, Financial News and Securities Times didn’t carry reports on Lou’s comments in their print editions yesterday.
The finance minister spoke to reporters at the U.S.-China Strategic and Economic Dialogue in Washington on July 11 after Li said last week that the government should keep restructuring the economy as long as growth, employment and inflation stay within limits he didn’t specify.
When asked whether there’s a limit on slower growth that officials will tolerate, Lou said, “we don’t think 6.5 percent or 7 percent will be a big problem,” without specifying any timeframe. “It’s difficult to give you a limit. But from the data we have, we have the confidence.”
He said, “please don’t forget that our expected GDP growth rate this year is 7 percent,” adding that “there won’t be much of a problem to meet our expectations this year.”
The Ministry of Finance hasn’t disputed media reports that Lou said 7 percent. The ministry’s news office hasn’t responded to faxed questions on his remarks sent by Bloomberg News on July 12 and the website has no statement referring to Lou’s comments.
Lou’s remarks spurred investor inquiries over whether the 2013 growth target has been cut, Zhang Zhiwei, chief China economist at Nomura Holdings Inc. said in a July 12 note. A revision of the official goal may require approval from the National People’s Congress, he said.
Macquarie Group Ltd. last week lowered its 2013 GDP growth forecast for China to 7.3 percent while Goldman Sachs Group Inc., Barclays Plc and HSBC Holdings Plc last month cut their estimates to 7.4 percent, which would be the slowest pace since 1990. The median projection of 56 analysts in a Bloomberg News survey last month was for 7.7 percent expansion this year.