China's premier says GDP growth slightly lower than 7.5pc is acceptable

GDP expansion just off 7.5 per cent target is acceptable if jobs and wages are boosted, Li says

PUBLISHED : Saturday, 19 July, 2014, 1:58am
UPDATED : Saturday, 19 July, 2014, 1:58am

Premier Li Keqiang said economic growth of slightly more or less than 7.5 per cent this year would be acceptable as long it still led to new jobs and higher wages, Xinhua said.

"A growth rate slightly higher or lower than 7.5 per cent is acceptable, as long as our development creates jobs, boosts incomes, has quality and efficiency, favours energy savings and environmental protection, and is not an exaggeration and is real," Xinhua quoted Li as saying at an economic symposium on Tuesday.

This shows that [Li] is more comfortable about the economy

Analysts suggested Li's latest remarks signalled some flexibility in hitting the annual growth target and put more emphasis on reform than simple expansion.

"This shows that he is more comfortable about the economy," said Lu Zhengwei, chief economist at Industrial Bank in Shanghai.

"When growth is back on target, there is no need to push too hard (on policy), which could worsen economic structures."

Li's softening tone on growth could also reflect increased optimism among policymakers that the economy has turned the corner after a burst of policy stimulus, including a hefty rise in bank loans in June.

The mainland's annual economic growth picked up slightly to 7.5 per cent in the second quarter as policy measures took effect, but analysts said Beijing would probably need to offer more support to meet its annual growth target in the midst of a slowing property market.

The cabinet emphasised at a regular meeting on Wednesday that this year's key economic targets must be accomplished, and urged local government officials to seriously implement reforms and policy measures.

Analysts saw these remarks as intended for local officials who were criticised by the cabinet for being "lazy and slack" in implementing the central government's policy directives as they kept their heads down to stay out of trouble during President Xi Jinping's anti-corruption campaign.

The government will stick with its "targeted" approach in macroeconomic policies, and will rely more on reforms and market forces to drive growth, Li said.

As a developing country, China must keep economic growth within a "reasonable range" over the long term, he noted.