China’s NPC meeting kicks off with 7.5% growth target, emphasizes market-oriented reforms

BEIJING - At the opening of the annual National People’s Congress in Beijing, Premier Li Keqiang has presented a “Government Work Report” reviewing economic developments and policy priorities for the coming year. The Report contains China’s official 2014 macro targets, all of which were in line with expectations and essentially unchanged from last year: GDP growth of 7.5%, inflation at 3.5%, M2 growth of 13.0%, and a fiscal deficit of 2.1% of GDP .

Consistent with policies announced at the November 3rd Plenum meeting, the Report also lays out reform priorities for 2014 in the areas of public administration and finance, the financial system, and SOEs. Improving the urbanization process and addressing environmental issues also receive heavy emphasis.

But while the Report was in line with expectations and re-emphasised the Government’s determination to press ahead with policies to boost productivity and rebalance the economy, it was short on new details, according to BBVA Bank researchers. “Also, by maintaining the growth target at last year’s level, rather than lowering it to 7.0% as had been speculated some months ago, the Government has signalled a preference to support near-term growth over a bolder approach to addressing rising financial fragilities and stepping up the pace of reforms,” BBVA says. www.bbvaresearch.com (ATI).