China’s premier has said the country’s target for economic growth is not set in stone as the leadership in Beijing prepare to meet and prioritise economic and social goals for the next five years.
China’s economic growth dipped to 6.9% in the third quarter of this year after recording 7% rises in the first two quarters of 2015. The 6.9% rate was the lowest since the 6.2% achieved in the first three months of 2009 when the global economy was in recession.
Economists are worried that the world’s second-biggest economy is slowing down fast after a large drop in trade that has been felt around the world. The overheated Chinese property market has prompted a contraction in the construction industry while manufacturing output has slumped as exports have fallen.
Li gave his speech at the Central Party School, which trains officials. He said: “We have never said that we should defend to the death any goal, but that the economy should operate within a reasonable range.” His remarks were posted on the central government’s website late on Saturday.
China cut its main interest rate last week for the sixth time since November 2014, feeding fears that its economy is about to slow further. If the economy grows by less than 7% this year it will be China’s weakest rate of annual growth for 25 years.
The Communist party’s central committee will meet for the first four days of this week to set out its 13th five-year plan. Leaders are likely to set a target for economic growth of about 7% at the meeting, policy insiders told Reuters.
Li said the Chinese economy had performed well in the past year amid problems in the global economy. Rising employment, higher tourism spending and growth in the service sector were reasons for optimism, he added.
“The hard work of people up and down the country and the enormous potential of China’s economy gives us more confidence that we can overcome the various difficulties,” he said.
Some more upbeat economists have argued that economic growth of about 7% is more realistic for China than the double-digit figures achieved for much of the 2000s. Heavy manufacturing is less important than in the past and services now make up more than half the economy, they point out.
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