China lowers GDP target, first time in 7 years

 Facing an economic slowdown due to dwindling exports, China, the world's second largest economy, has for the first time in seven years scaled down its GDP growth target to 7.5 per cent to focus more on structural problems and unbalanced development.

Into his last year in office after a decade-long stint in power, Chinese Premier Wen Jiabao presented his final work report at China's Legislature, the National People's Congress, scaling down the GDP growth target to the lowest projection for China in several years.

In the past several year’s Wen always projected conservative targets in his work report but this is the first in seven years that target was projected below eight per cent, reflecting hard times ahead of the world’s second largest economy this year in the face of shrinking export markets and rising trade deficit. “Here I wish to stress that in setting a slightly lower GDP growth rate, we hope to make it fit with targets in the 12th Five-Year Plan, and to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development,” Wen, who will be retiring at the end of this year after a decade long stint, said.

For China it has become more urgent but also more difficult to solve institutional and structural problems and alleviate the problem of unbalanced, uncoordinated, and unsustainable development, he said.

Last year the projected target for growth was eight per cent. China's economy expanded by 9.2 per cent in 2011 to 47.16 trillion yuan (US$7.49 trillion) from a year earlier after it grew 10.3 per cent in 2010.

China’s exports fell 0.5 per cent in January, the first drop in more than two years, as a sluggish global economy hurt demand for Chinese products.

In the fourth quarter last year, the country’s GDP growth decelerated to 8.9 per cent year-on-year, the slowest pace in 10 quarters.

The lower growth projections followed the adverse impact of the global economic downturn being felt by China, hurting its export oriented economy. Stability appears to be the buzzword at a time when the current leadership headed by President Hu Jintao and Wen along with several leaders of Communist Party of China (CPC) are set to retire later this year.

At the end of over an hour-long speech, Wen, 70 received a round of applause from over 3000 deputies, many of whom will be retiring along with him to pave the way for a new leadership.

Regarded as a reformist who in recent times spoke of the necessity for political reforms, especially in the aftermath of a revolt by farmers of a small village, Wen today avoided any reference to reforms in general.

Instead he mainly stuck to some of the new modified targets his government had set itself in various fields.

“This year is an important year of the 12th five-year plan period and the last term of my government,” Wen said.

Hu as well as Vice President Xi Jinping, who was expected to take over as the President along with entire top brass of the party and government were present during today's NPC inaugural meeting.

Reviewing the government work in 2011, Wen said:We consolidated and built upon our achievements in responding to the global financial crisis, and got the 12th Five-Year Plan period off to a good start.

However, Wen said we are keenly aware that China still faces many difficulties and challenges in economic and social development".

Despite all the challenges, Wen noted that China is still in “an important period of strategic opportunities” for development, and there are a number of favourable conditions to maintain steady and robust economic development for a long time.

In addition to a projected GDP growth rate of 7.5 per cent, other main targets for this year's economic and social development are as follows: to create more than 9 million new jobs in towns and cities, keep the registered urban unemployment rate at or below 4.6 per cent and keep the CPI increase to around 4 per cent, Wen said.