China scales down its GDP target first time in 7 years

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Facing an economic down turn due to steady fall in exports, China for the first time in seven years projected a lower growth, scaling down its GDP growth target to 7.5 per cent in 2012 from last year's eight per cent.

The lower growth target was projected in the annual government work report delivered by Premier Wen Jiabao at China's Legislature, the National People's Congress here today.

This is the first time for the Chinese government to lower its economic growth target after keeping it around 8 per cent for seven consecutive years.

"Here I wish to stress that in setting a slightly lower GDP growth rate, we hope to make it fit with targets in the 12th Five-Year Plan, and to guide people in all sectors to focus their work on accelerating the transformation of the pattern of economic development," said Wen, who retires at the end of this year after a decade long stint.

Making economic development more sustainable and efficient, so as to achieve higher-level, higher-quality development over a longer period of time, he said.

Previously, China has announced to target a seven per cent GDP growth from 2011 to 2015, the country's 12th Five-Year Plan period. China's economy expanded by 9.2 per cent in 2011 to 47.16 trillion yuan (USD 7.49 trillion) from a year earlier after it grew 10.3 per cent in 2010.

In the fourth quarter last year, the country's GDP growth decelerated to 8.9 per cent year-on-year, the slowest pace in 10 quarters.

The lower growth projections followed the adverse impact of the global economic down turn being felt by China hurting its export oriented economy.

The government has set the main theme of this year's economic and social development as "make progress while maintaining stability" at a tone-setting central economic work conference in December last year.

Wen said China will continue to follow a proactive fiscal policy and a prudent monetary policy, carry out ''timely and appropriate anticipatory adjustments and fine-tuning and make its policies more targeted, flexible, and anticipatory," according to the report.

"To achieve steady growth, we will continue to expand domestic demand and keep foreign demand stable, vigorously develop the real economy, work hard to counter the impact of various factors of instability and uncertainty at home and abroad, promptly resolve emerging issues that signal unfavourable trends, and maintain stable economic performance," the premier said.

Wen said the government has set the this year's consumer price growth at around four percent. The country's consumer price index (CPI), a main gauge of inflation, rose 4.5 per cent year-on-year in January, down from a 37-month high of 6.5 per cent in July last year.