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China plans 7% 2015 growth target

China plans to cut its growth target to around seven per cent in 2015, its lowest goal in 11 years, sources said, as policymakers try to manage slowing growth, job creation and pursuing reforms intended to make the economy more driven by market forces.

The growth target, which is set to be announced by Premier Li Keqiang at the annual parliament session in March, was endorsed by top party leaders and policymakers at a closed-door Central Economic Conference in December, said a number of people with knowledge of the outcome of meeting who spoke to Reuters.

The target, which is in line with market expectations, has not been previously reported.

The government will have to balance economic growth, employment and structural reforms this year

“This year’s economic growth target will be around seven per cent, but the seven per cent should be the bottom line,” said one of the sources, an influential economist who advises the government.

“The government will have to balance economic growth, employment and structural reforms this year,” said the economist, who requested anonymity due to the sensitivity of the matter.

The use of ‘around’ to qualify the growth forecast repeats terminology used last year by authorities to show they were not fixed on a hard target.

Although the target was endorsed in December, it is still possible for it to be adjusted before Parliament convenes.

Officials said slowing growth reflects reforms to put the economy on a more sustainable path, but they are wary of a sharp slowdown that could cause job losses and debt defaults.

Central Bank Governor Zhou Xiaochuan has acknowledged a lower growth target was on the cards for 2015, saying it would be discussed by Parliament in March. The government is also looking at lowering its forecast for consumer price inflation to around three per cent, the sources said.

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