China targets 7.5-pct GDP growth (2)

RAPID GROWTH OVER?

Some analysts fear that rapid growth will no longer be possible for China due to domestic and external uncertainties.

The Chinese economy has expanded by an average of 9.3 percent annually over the past five years.

But Fan Gang, an economist and former advisor to China's central bank, said it is too early to come to that conclusion.

"China is far from saying goodbye to rapid growth, but rapid growth is not necessarily equivalent to overheated growth or two-digit growth highlighted by soaring inflation and asset bubbles," Fan said.

An ideal growth rate for China would be around 8 percent, said Fan, who once served as an economic advisor to China's Cabinet.

"From this perspective, I see no problem for China to maintain rapid growth for another 20 or 30 years," said Fan.

Wang Yiming, deputy director of the Macroeconomic Research Institute under the National Development and Reform Commission, said China's potential economic growth rate has dropped to between 7 and 8 percent.

"Therefore, the 7.5-percent target this year is in accordance with the potential rate," Wang said.

As promised by the Communist Party of China last autumn, China will double its GDP in 2020 in comparison to 2010, which will require the country to keep an average annual growth rate of 7.2 percent during the period.

LOWER INFLATION GOAL

The government has also decided to rein in inflation more decisively by lowering the control target for this year's consumer price index (CPI) increase to around 3.5 percent, compared with 4 percent targeted last year.

"China is still under considerable inflationary pressure this year and maintaining price stability has always been an important macroeconomic control target," Wen said.

Apart from upward pressure on the prices of land, labor, agricultural products and services, China is facing imported inflationary pressure resulting from quantitative easing policies in major developed countries, he noted.