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China sets lower GDP for '05

December 09, 2004 13:52 IST
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Notwithstanding the high growth rate China is witnessing, the Communist nation is likely to set a gross domestic product target of less than eight per cent in 2005 to enable a soft landing.

"The Chinese government may set a target lower than 8 per cent for next year to encourage local governments and investors to pay close attention to efficiency and profit, instead of just the scale of their investments," the China Daily reported on Thursday quoting economists.

The report came as China's economic policy-makers started discussing next year's national targets for economic and social development at a meeting in Beijing on Wednesday.

The meeting will decide next year's national targets for economic and social development, the report said.

The National Development and Reform Commission came up with suggested indicators for economic growth, job creation, consumer prices and grain growth.

A mild slowdown of China's GDP growth is expected in 2005, though the NDRC declined to unveil the figures, which will be decided during an annual session of the National People's Congress, China's parliament, in March 2005.

Economists said the "mild" target is aimed at curbing excessive growth in some sectors, which are putting a strain on transportation and power supplies, driving up the prices of raw materials and damaging industries across the country.

Spokesman of the NDRC, Cao Yushu the most powerful cabinet department in charge of social and economic development, had said earlier the economy would stay in the fast-growth track next year, though the growth rate should decline moderately compared to this year.

The situation was similar last year, the paper noted. Last December, the NDRC set a target of seven per cent economic growth for 2004 - down from 2003's rate of 9.1 per cent.

However, China's GDP rose by 9.5 per cent in the first three quarters of the year.

Lin Yueqin, a researcher with the Chinese Academy of Social Sciences, said China should take more steps to cultivate a so-called "scientific approach" to social development.

But Liu Guoguang, senior economist CASS said China needs a relatively longer circle of rapid economic development.

"So far, the Chinese economy as a whole is not overheated but investment needs a soft landing," Liu said, stressing that a higher growth rate can help solve China's problems such as poverty, education and the need for a social security system.

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