Business / Economy

Slower growth likely in 2015

(Agencies) Updated: 2014-10-18 09:58

Slower growth likely in 2015

Containers being loaded onto a cargo ship at a port in Qingdao, Shandong province on Aug 8, 2014. [Photo provided to China Daily]

A slew of data is expected to help clarify whether more easing will be required

China will set an economic growth target of about 7 percent for 2015, the weakest expansion in a generation as the country's leaders tackle debt risks and imbalances, according to analysts polled by Bloomberg.

Thirteen of 22 economists said China will settle for about 7 percent growth next year, down from this year's 7.5 percent. Sixteen said the government should change its targeting policy, with nine indicating a range would be better Seven suggested targets be scrapped altogether in favor of projections or assumptions of growth, as most other nations provide.

The Chinese government is holding off on any broad stimulus, with Premier Li Keqiang expressing a preference for policy improvements and People's Bank of China Governor Zhou Xiaochuan vowing to stick with a prudent monetary stance.

Economists estimated GDP probably expanded 7.2 percent in the third quarter of the year, weighed down by a property slump-the slowest in more than five years.

"Setting 7.5 percent this year gave Beijing too little space for reform and deleveraging," said Yao Wei, a Paris-based China economist at Societe Generale SA.

"The recent talk from policy makers has sent strong signals that the growth target is less important as long as the labor market is stable. That suggests a new consensus is forming at the top that more slowdown should be tolerated."

Yao expects the government to set a range of 7 percent to 7.5 percent and said there is "no indication" that anything below 7 percent is acceptable to the government yet.

China typically announces the annual growth aspiration at the National People's Congress in March, after policymakers meet late in the year at the Central Economic Work Conference to hash out policies. The Communist Party of China's top officials gather in Beijing next week for the Fourth Plenum, where moves to centralize and standardize the legal system are expected to top the agenda.

The broadest measure of new credit rose to a three-month high in September as the central bank's targeted measures to boost liquidity helped spur lending, data on Thursday showed. Subdued inflation figures released a day earlier had suggested the central bank has more room to further ease monetary policy.

The PBOC cut the interest rate it pays lenders for 14-day repurchase agreements for the second time in a month this week, and further data next week-including GDP, industrial production and investment-are expected to help show whether more easing is needed.

China's main government-backed research organization this month gave one of the strongest signs yet that leaders will keep eschewing broad stimulus just to meet this year's goal.

The Chinese Academy of Social Sciences forecast a 7 percent expansion next year, according to the Shanghai Securities News. The Beijing-based institution estimates growth of 7.3 percent this year, the newspaper reported.

China's growth target was 7.5 percent in 2012 and 2013, and expansion came in at 7.7 percent each time.

Slower growth likely in 2015

Slower growth likely in 2015

Weak inflation makes more room for policy change China's September PPI down 1.8%

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