China to keep policy and growth steady in 2014, push reform

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China's President Xi Jinping attends a meeting with former U.S. President Bill Clinton (not pictured) at the Great Hall of the People, in Beijing, November 18, 2013. Photo: Reuters

China's leaders pledged to maintain stable economic policies to achieve reasonable economic growth in 2014 while forging ahead with reforms, as they wrapped up a closed-door meeting on Friday, state radio reported.

Top leaders have unveiled a bold reform agenda for the next decade as they try to steer the world's second-largest economy towards more sustainable growth after three decades of breakneck expansion.

China will stick with a prudent monetary policy and pro-active fiscal policy next year, the report said, citing a statement issued after the annual Central Economic Work Conference, which brings together top party leaders, government ministers and provincial officials.

"We will maintain stability and continuity in macro-economic policies. We will maintain appropriate growth in gross domestic product," it said.

No target for 2014 GDP growth was announced. Annual targets on economic growth, inflation, investment and money supply will be unveiled in parliament in March.

Top government think tanks, which make policy proposals, have been divided over whether the growth target should be cut to 7 percent in 2014 from this year's 7.5 percent.

Last month, Premier Li Keqiang said economic growth of 7.2 percent was needed to keep a lid on unemployment, and on Monday the official China Securities Journal said the government was likely to stick with this year's 7.5 percent target for 2014.

"No matter what target may be next year, there will be no major policy adjustments as stability will be the core objective for the government," said Li Huiyong, chief economist at Shenyin & Wanguo Securities in Shanghai.

The economy is widely seen growing an annual 7.6-7.7 percent in 2013, just ahead of the government's target, but still near the weakest pace since the Asia financial crisis in the late 1990s.

The meeting, chaired by President Xi Jinping, called for keeping reasonable growth in credit and social financing next year, while pushing forward interest rate and yuan currency reforms.

Some government economists believe the government will target 3.5 percent inflation, 13 percent broad money supply growth and 20 percent growth in fixed-asset investment for 2014.


The government would control local government debt and take steps to resolve over-capacity problems, it said without elaborating.

China's leaders have pledged to steer the economy away from its dependence on investment and exports to one driven more by consumption, services and innovation, which they consider more sustainable.

New standards have been already issued for local officials. Their performance will no longer be based simply on their region's growth rate, but will include resource and environmental costs, debt levels and work safety.

The government aims to set specific reform plans for next year after the Communist Party last month unveiled sweeping economic and social changes, including relaxing the country's one-child policy and liberalizing financial markets.

The leadership has decided to set up a high-level central leading group on reforms. State radio said on Friday all local governments would establish similar bodies to steer change.

Reforms with "clear directions" would be implemented next year or even more quickly, while reforms that tended to have wider impacts or those "without deep understanding" would be subject to experiment, it said without elaborating.

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