Here’s a Clear Sign China Will Set a Lower Growth TargetBloomberg News
China’s main government-backed research organization just gave one of the strongest signs yet that leaders will eschew broad stimulus to meet this year’s economic-growth target and plan a lower goal in 2015.
The Chinese Academy of Social Sciences today forecast a 7 percent expansion next year, according to the state-run Shanghai Securities News. The Beijing-based institution estimates growth of 7.3 percent this year, the newspaper reported on its website, lower than its 7.5 percent projection in December, which was also the government’s 2014 target rate.
While no surprise to economists -- the 2014 forecast matches the median estimate of 46 analysts surveyed by Bloomberg News -- seeing the numbers from a quasi-official source suggests leaders won’t splurge on stimulus just to meet the 2014 goal. Premier Li Keqiang has reiterated this year that growth can be a little bit above or below 7.5 percent and said this week that China prefers reform to stimulate the economy.
“CASS is a think tank, but you could say that it’s in the government ecosystem,” said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong, who formerly worked at the European Central Bank. The forecast sends out two signals, Shen said: The 7.5 percent figure will be “hard to meet this year,” and it’s not necessary to set the target at that rate in 2015.
China normally announces the year’s growth target when the premier speaks in March at the legislature’s annual meeting.
The Beijing-based researcher, ranked among the top 10 non-U.S. think tanks in a University of Pennsylvania survey, cited slowing investment growth for the moderation in economic expansion, according to the Shanghai Securities News, which cited a report from the institution.
China’s growth goal was 7.5 percent in 2012 and 2013, and expansion came in at 7.7 percent each year, according to the statistics bureau. The International Monetary Fund in July urged China to set a growth target of 6.5 percent to 7 percent for 2015, warning of a “web of vulnerabilities” in the economy from real estate and rising debt.
— With assistance by Scott Lanman, and Xiaoqing Pi