Chinese growth likely to remain at 7.5pc next year

Xi Jinping won't tolerate a bigger slowdown from the lowest goal since 2004. Photo / AP
Xi Jinping won't tolerate a bigger slowdown from the lowest goal since 2004. Photo / AP

China may maintain its annual economic growth target at 7.5 per cent next year in a sign the new leadership headed by Xi Jinping won't tolerate a bigger slowdown from the lowest goal since 2004.

Nine of 16 analysts surveyed between November 22-30 by Bloomberg News forecast the Government will set a goal unchanged from 2012, while six expect a decline to 7 per cent and one sees an increase to 8 per cent.

Top economic officials meet this month to map out policies for 2013 and may set the target that will be officially announced in March at the annual session of parliament.

A goal of 7.5 per cent would signal that Xi and Li Keqiang, set to succeed Wen Jiabao as premier, are prepared to expand fiscal and monetary easing should China's nascent economic recovery falter. A manufacturing gauge rose to a seven-month high in November, data released on Saturday showed, adding to evidence growth is rebounding from a three-year low.

"This will send a clear message from the new leadership that they want to ensure stable economic growth," said Li Miaoxian, a Beijing-based economist with Bocom International Holdings, the investment banking unit of Bank of Communications "Seven per cent would be too low because it will make the market worry."

Li forecast a target of 7.5 per cent, which he said would probably lead to actual growth higher than 8 per cent and allow the Government to be "more accommodative" in its economic policies.

The increase in November's official manufacturing Purchasing Managers' Index to 50.6 underscores optimism the economy is recovering after a seven-quarter slowdown. The yuan had its fourth monthly gain, its longest winning streak in more than a year, on signs economic growth is recovering. The currency climbed 0.2 per cent in November to 6.2267 per dollar in Shanghai and on November 27 reached the highest level since China unified official and market exchange rates in 1993.

- NZ Herald

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