China advisers recommend 7 percent growth goal in 2015 as leaders meet

Tue Dec 9, 2014 1:00am EST
 
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By Kevin Yao

BEIJING (Reuters) - China's leaders should cut next year's economic growth target to 7 percent, according to influential advisers recommending the country's leadership which was meeting on Tuesday to map out economic and reform plans for 2015.

China looks set to miss its growth target this year for the first time since 1999, and full-year growth is likely to be the weakest in 24 years. The government last cut its annual growth target in 2012, to 7.5 percent from the 8 percent it had kept for eight years.

Government-run think-tanks, which are influential in the decision-making process but do not wield power themselves, plan to recommend that Beijing reduce its official 2015 GDP growth target to 7 percent from 7.5 percent this year, sources said.

"President Xi (Jinping) has already hinted at the growth target when he said growth of 7 percent is the highest in the world," said a senior economist at the Chinese Academy of Social Sciences (CASS), who declined to be named.

"I think it should be 7 percent if there are no more surprises. But it can't be lower than 7 percent, otherwise there could be employment problems and debt default problems."

China's reform-minded leaders have shown greater tolerance for slower growth, but will have to tread carefully to avoid a sharper slowdown that could fuel job losses and debt default risks, analysts say.

The annual Central Economic Work Conference, which state radio said meets from Tuesday, may reiterate a prudent monetary policy, but the sources believe the underlying tone could be accommodative to ward off a sharp growth slowdown.

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An employee welds the exterior of a vehicle along a production line at a factory in Qingdao, Shandong province December 1, 2014. REUTERS/China Daily