Chinese economy cools down; GDP growth target to be lowered China’s consumer prices grew at its slowest pace in five years, adding to signs of a cooling economy. According to the latest release on Wednesday, China’s #CPI rose 1.4 percent year on year in November, coming in below market expectations. Meanwhile, producer prices continued their tumble, down 2.7 percent, the weakest reading this year. It also marked the 33rd consecutive month of decline. China’s factory activity has been weighed down by a slumping real estate property market and overcapacity in several industries. China may cut next year’s economic growth target to seven percent according to influential advisors working with the country’s top leaders who are meeting now to map out economic and reform plans for 2015. Policymakers are expected to acknowledge challenges in maintaining rapid growth while deepening structural reforms. Analysts say that there is a high chance the leadership will agree to adopt a lower #GDP #growth target for next year. Sources say several government-run think tanks are advising the leaders that they reduce the government’s economic growth target to seven percent for 2015 from 7.5 percent this year. The advisors are also recommending a lower inflation rate of around three percent. This year’s inflation target is 3.5 percent. The Central Economic Work Conference is expected to last two days or more and will also set the tone for monetary and fiscal policies in the year ahead. The overall Chinese economy has slowed in recent quarters. President Xi Jinping has called the economy a “new normal state” that features slower growth but better structural reforms. Analysts say the “new norm” shows China’s higher tolerance for slower growth and its determination to move away from dependence on investments to a more consumption dependent economy. Yet, they say that there are still challenges to be met and that consumption-driven growth should rely more on market forces than government-sponsored investment growth.
Posted on: Wed, 10 Dec 2014 05:11:00 +0000
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