China will cut its growth target to 7 per cent next year in a sign of the government’s determination to push through structural reforms and steer the economy on to a more sustainable path, one of the country’s top investment banks has predicted.
With Communist party leaders gathered in Beijing for a meeting that will set China’s policy direction for the coming decade, investors and companies have been looking for clues about their strategic thinking. A lowering of the country’s growth target – although unlikely to be announced until the annual Chinese parliament in March – would be an important distillation of the government’s plans.
China has consistently exceeded its annual growth targets in practice, but a cut would still be an indication of Beijing’s willingness to tolerate slower growth in the interest of addressing risks from rising debt levels to soaring property prices.