Same target, different conditions

By Wu Jiao (China Daily)
Updated: 2009-03-06 07:50

This is the fifth year in a row the government has targeted 8 percent annual economic growth.

But what a difference a year makes.

In the years earlier, the theme was: Preventing overheating.

This year, the tone is: Trying to achieve the target.

Premier Wen Jiabao told the national legislature's annual session yesterday that the government is aiming for growth of 8 percent - essential for an economy with a population of 1.3 billion to "expand employment for both urban and rural residents, increase people's incomes and ensure social stability".

Full coverage:
NPC and CPPCC 2009

Wu Xiaoqiu, an expert at Renmin University of China, said it would be "an arduous task" to achieve that figure.

"The most important measure the government can take is to accelerate domestic demand through appropriate fiscal and monetary policies," Wu said.

In 2007, the economy grew by a sizzling 13 percent while moves to cool down the economy last year saw a more modest 9 percent.

Last year's growth was a seven-year low, and broke a five-year streak of double-digit expansion as the global financial crisis took its toll on the world's fastest growing major economy.

Wu warned that growth expectations should be set lower in case the government stimulus measures "have a negative impact on the restructuring of China's economy".

JP Morgan Chase Co, in a report issued on Wednesday, said China's growth might hit 7.2 percent in 2009, compared to 6.7 percent forecast by the IMF in February.

But several institutions and analysts are more bullish.

The Chinese Academy of Social Sciences, in a recent report, forecast 9 percent growth.

Li Daokui, an economist at Tsinghua University, said earlier that China would have no problem maintaining 8 percent growth, and that even 9 percent was within reach.

Li said signs of recovery have emerged in several sectors.

They include rising consumer goods sales around the Lunar New Year, a modest uptick in December electricity output and industrial production, and increased government infrastructure spending, which signal increasing domestic demand rising from the US$586 billion stimulus plan unveiled in November.