China Flexibly Set GDP Target For 2014

In yesterday's government work report, Premier Li Keqiang mentioned that the target of GDP growth is around 7.5% this year. Many market participants believe that this means that China will stick to the bottom line of 7.5%. But if we ignore the "left and right sides", it may be difficult to really understand the intentions of the government.

On Thursday, Chinese finance minister Lou Jiwei explained at the press conference.

The 7.2% and 7.3% growth rate of GDP can be regarded as the goal of growth. All the 2014 targets have been used in the "left and right" formulation.

　　 Gross domestic product The growth goal is flexible. Employment is the most important goal.

The growth of GDP on the left or right side of the 7.5%, the number on the left and the number on the right are not particularly important, but the importance is employment.

He also said that China's economic growth rate is higher than or below 7.5%, which is not as important as achieving the employment goal.

This is a very important signal. In fact, Li Keqiang stressed yesterday that this goal "is conducive to enhancing market confidence." But hard work must be done.

Previously, on Economic growth target There are many conjecture that the government research institutions such as the development research center of the State Council, the Chinese Academy of Social Sciences and the National Information Center have recommended that the expected growth rate of GDP next year be reduced to 7%, so that more space can be reserved for economic restructuring and structural adjustment.

But the higher level seems to be more inclined to the goal of 7.5%, which has been mentioned in the article before the Wall Street. There are two main purposes to be considered. One is to maintain rapid growth in the economy, so as to protect employment. Two, it is concerned that the market expectation will deteriorate after the growth expectation is lowered.

But what is the attitude of the decision-making level? Li Wei This Wednesday article can reveal a hint. He said China's economic growth in 2014 will be slightly higher than 7%. This is different from the official 7.5% statement. Zhang Zhiwei, Nomura Securities, wrote in the report that this means that the decision making circle's outlook on China's economy may not be as optimistic as the GDP goal has revealed.

Li Wei also predicted that the contribution of fixed asset investment growth to economic growth declined slightly. This shows that he does not think that China will not introduce a new round of fiscal stimulus this year.