FROM 8% TO 7.5%

CHINA TARGETS SLOWER GROWTH FOR FIRST TIME IN 8 YEARS

David Pierson

Los Angeles Times, March 5, 2012

In a sweeping symbolic gesture, China lowered its growth target for this year, sending its clearest message yet that the world’s second-largest economy could no longer expand at its steroid-charged pace.

Speaking to about 3,000 delegates at the annual meeting of the National People's Congress in Beijing on Monday, Premier Wen Jiabao said China would cut its growth target for the first time in eight years, from 8% to 7.5%, to make the country’s economy more "sustainable and efficient."

Half a percentage point may not seem like much. But in China, it broadcasts a signal to policymakers, both national and local, that development will have to strike a better balance.

Swaths of empty luxury apartment blocks, environmental degradation and violent rural protests over land seizures are just some of the ways ordinary Chinese can point to vast inequities generated by no-holds-barred development.

"The announcement today means China will not simply chase after high-speed growth," said Hu Xingdou, an economist at the Beijing Institute of Technology. "Instead, it will seek high-quality growth."

How much of that scaling-back will be of China’s choosing remains to be seen. A reduced growth rate could owe just as much to deteriorating trade with Europe and investment constraints brought on by rising public debt and inflation.

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