China Eyes 8% GDP Goal in 2010

[Click for Chinese Version]

(Caixin Online) The Chinese government set the goal for 2010 gross domestic product at 8 percent, equal to the last year's target.

It was announced in the work report delivered by Chinese Premier Wen Jiabao to the annual session of the National People's Congress.

Premier Wen outlined the desire for sound development and the need to "guide all sectors to focus on transforming the pattern of economic growth and restructuring the economy."

In the second half of 2009, the government sought to address the risks of overcapacity, property bubbles and inflation while trying to switch growth drivers from the export sector to domestic consumption.

The work report set the consumer price index (CPI) target at 3 percent, slightly slower than 2009's target of 4 percent.

The proactive fiscal policy and moderately loose monetary policy will be continued into 2010, Premier Wen said. He also stressed flexibility in carrying out the policy while keeping the continuity of the macroeconomic policy.

The money supply growth rate is set at 17 percent and total lending target at 7.5 trillion yuan, according to the work report. In 2009, M2 grew at 27.68 percent while annual new credit was 9.59 trillion yuan. Bank lending in 2010 will be directed at projects which kicked off in 2009 and loans for new projects will continue to be highly restricted.

The report also highlighted a commitment to keep the total deficit at 1.05 trillion yuan, with the national deficit at 850 million yuan and local debt at 200 billion yuan. It will be below 3 percent of national domestic product.

China's 4 trillion yuan stimulus plan last year sent governments, particularly local governments, into large borrowing sprees. The Premier warned that local governments must manage debt efficiently to avoid potential financial risks. 

(Translated by SHX)

Full Article in Chinese: http://economy.caing.com/2010-03-05/100122857.html