Chinese growth target rumoured to be reset to 6.5%
China may lower its long-term target for gross domestic product growth to 6.5% per year from the current 7%, according to rumours emerging from the fifth plenum meeting of senior policymakers in Beijing.
Chinese premier Li Keqiang was reported to have said that in order to have a "moderately prosperous" future, China requires annual growth of at least 6.53% over the next five years, according to unidentified sources cited by Bloomberg.
Bloomberg reported that Li's set the target in a speech to Communist Party members on Friday, though while they were shared on Chinese social media earlier have not been confirmed by state media.
Market reaction to the apparent new target has been minimal, with the Shanghai composite index slightly higher but the rest of Asia mixed.
Traders were sceptical about whether the new target, if it is officially confirmed, could signal willingness to accept lower growth whilst maintaining a ‘moderately prosperous’ economy and what that would mean in terms of the monetary or fiscal stimulus needed to support such a growth, or reforms that may stunt it.
Jim Reid, analyst at Deutsche Bankm said: "While this doesn’t appear to be the new official target of the Chinese government, the comments are a big signal that China’s government look set to lower their growth target when we eventually hear the outcome from the four-day meeting."