BEIJING — China’s central government will aim for 7.5 percent economic growth this year, a steady pace that is just slightly slower than last year.
In his opening address to the annual session of China’s National People’s Congress on Wednesday, Premier Le Keqiang told the legislative body that the central government would target 7.5 percent growth in gross domestic product this year, while aiming to contain inflation at 3.5 percent or less.
China’s economy grew by 7.7 percent last year, continuing an ongoing trend of slowed expansion amid a more difficult international economic climate. The targeted growth rate for 2014 would be the lowest rate of expansion for China’s economy since 1999.
In his speech, Li promised that China would move forward with broad economic reforms as the world’s second-largest economy transitions away from one heavily dependent on manufacturing. In the short-term, new economic measures will include a broader currency band and possible interest-rate reforms.
“China’s reform has entered a critical stage and deep water zone,” Li said. “In carrying out reform, we need to focus on areas where the public call for reform is strongest, the most pressing problems hindering economic and social development, and links on which there is extensive public consensus.”
Specifically, Li noted, the government will target areas that encourage the development of market economics and stable employment. Li said in his speech that the government will hold national unemployment to 4.6 percent or less, but China’s total unemployment numbers are opaque and often difficult to gauge. Overall, the central government’s budget this year will total $219 billion, with a deficit rate of 2.1 percent.
Li’s speech, which marks the start of the weeklong session of the congress, often characterized as a rubber-stamp legislature, also focused heavily on the ongoing drive for China to become a consumer-based economy. He said the national government would continue to push domestic consumption as a critical component of economic growth.
“Boosting domestic demand is both a major force driving economic growth and an important structural adjustment,” said Li. “We need to fully leverage the basic role of consumption and the key role of investment…stimulate both supply and demand, and establish a permanent mechanism for increasing domestic demand.”
At the same time, China’s leaders are pushing to tamp down ingrained institutional corruption, often a major driver of spending. Li did not address the anti-corruption push at great length in his speech, but there is little doubt it will continue in the coming year.
Li said all governmental levels in China must abide by three rules: no new construction or expansion of government buildings; a total reduction in government employees, and a reduction in the amount of spending on official visits overseas, official vehicles and “official hospitality.”
“Governments at all levels must practice economy, eliminate waste and tighten their belts,” said Li.
The premier also spoke in more general terms about increasing environmental protection and cleanup, educational and social security reform.