Chinese parliamentary sessions 2014

Politburo focuses on growth ahead of Li Keqiang's first work report

Politburo outlines goal of keeping economic expansion within 'reasonable range' as premier prepares to deliver his first address to NPC

PUBLISHED : Tuesday, 25 February, 2014, 4:48am
UPDATED : Tuesday, 25 February, 2014, 5:02am

Top leaders in Beijing have pledged to keep the economy growing within a "reasonable range" while forging ahead on economic reforms, setting the tone for Premier Li Keqiang's first annual work report next week.

The government will continue to maintain "proactive fiscal and prudent monetary policies", the Politburo, the Communist Party's decision-making body, said. It did not provide a forecast for economic growth.

The central government is trying to rebalance the economy to rely less on exports and government-debt-fuelled spending by increasing the country's domestic consumption.

A meeting of top Communist Party leaders in November outlined a series of economic reforms, including opening up more sections of the economy to private enterprise.

The Politburo meeting, chaired by President Xi Jinping , discussed the government work report Li will deliver to the annual session of National People's Congress, the national legislature, on March 5.

Shen Jianguang, chief China economist at Mizuho Securities Asia, said the statement suggested the government was committed to maintaining steady economic growth, despite saying at the party plenum in November that priority would be given to the reform programme.

"A reasonable range means an annual growth rate in GDP of between 7 and 8 per cent," Shen said.

The Politburo statement said the government aimed to improve the quality of growth and achieve breakthroughs in major reforms.

The nation's economic development faced a complex international environment, but there was still a good base to maintain medium- to high-speed growth, the statement said. Li has previously said a gross domestic product increase of 7 per cent to 7.5 per cent a year constituted a medium- to high-growth rate.

In his policy address to lawmakers, Li is expected to announce his government's target for economic growth this year.

Some analysts have speculated that the government may lower the annual growth rate target to 7 per cent from last year's 7.5 per cent.

Li has signalled his determination to sacrifice some short-term growth to focus on economic reforms.

The economy grew at 7.7 per cent last year, matching the growth rate in 2012.

People's Bank of China governor Zhou Xiaochuan said at a G-20 meeting of finance ministers and central bankers in Sydney that the government was taking a cautious approach towards encouraging bank lending, and that it was looking for steady, controlled growth.

"China will work on balancing the need for economic growth, reforms and stability," Zhou said in a statement.

"Growth of 7 to 8 per cent is not only suitable for China, it is also good for advancing world economic growth and sustaining the global economic environment," he said.

Shen said Li would probably announce more details about economic reforms in his policy address next week.