Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

China's Five-Year Economic Plan Calls For Slower Growth

Economics / China Economy Mar 01, 2011 - 08:47 AM GMT

By: Money_Morning

Economics

Best Financial Markets Analysis ArticleDon Miller writes: China will take steps to cool off its red-hot economy in the next five years largely by increasing domestic consumption and de-emphasizing exports, Premier Wen Jiabao announced in an online chat with the country's citizens on Sunday.

Wen, China's leading economic official, said the government's official target for average gross domestic product (GDP) growth over the next five years will be reduced to 7% annually, down from a target of 7.5% in the past half decade.


China needs to slow economic growth to curb soaring food and housing prices and to restructure its economy, even as most developed economies around the globe struggle to sustain expansion.

"We want to put the emphasis of our work on the quality and the benefits of economic growth," Wen said. "We want the fruits of development to benefit the people."

Wen made his comments as the country prepares for the formal release of China's next five-year economic plan at the annual meeting of its National People's Congress that begins on March 5.

Even though Wen's message was straightforward, many analysts feel the lower growth target is more of a symbolic gesture because China has blown through its stated target of 7.5% GDP growth for the last six years in a row. Growth reached 10.3% in 2010, making China the fastest-growing major economy in the world.

"No one will really have 7% as their target. Everyone's going to be higher than that. [But] the message is that they want growth to slow down," Kenneth Jarrett, head of APCO Worldwide's China consultancy, told The Telegraph.

Wen also pledged to curtail consumer price increases by reducing lending, boosting agricultural production, and punishing hoarding and price manipulation. Earlier this month, China accelerated its campaign against surging inflation by raising interest rates for the third time since mid-October.

Inflation in China rose to 4.9% in January from 4.6% in December. But those numbers exclude food prices, which are increasing at the alarming rate of 10%, according to figures released in January.

Wen acknowledged that China's official rate of inflation doesn't reflect the rising cost of food, which is making life difficult for hundreds of millions of Chinese people.

"Rapid price rises have affected the public and even social stability," Wen said in the online forum that was broadcast across all state media in China. "The Party and Government have always made a priority of keeping prices at a generally stable level."

Abundant foreign currency and grain reserves should be sufficient to curb inflation, he said.

That may mean China is considering increasing imports of grain and other foodstuffs to protect against price gains, Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB, told Bloomberg.
The announcement fueled speculation among analysts that slower growth in China may put a damper on the recent surge in commodity prices, a sector that is largely being driven by demand from the country's strong growth.

"It may cause some initial reaction that tempers some speculative demand for some commodities," Mark Kristoff, chief executive of Traxys Group, a New York-based commodities trading company, told The Journal.

But market participants are still skeptical that the Red Dragon can successfully curtail its GDP growth and consequently reduce the amount of raw materials it consumes every year.

Demand for agricultural products in China continues to remain strong despite efforts to cool its economy, which may temper the market's reaction to the announcement. And even if China manages to achieve the desired 7% growth, the country is still likely to consume the equivalent of the steel production of Germany every year, Kristoff said.

"On balance, it will still be very significant annual consumption growth for raw materials. I don't anticipate that will be a longstanding, depressing statement as relates to the markets in general," he said.

China's Premier also decried the effects China's blistering economic growth has had on the environment.

While China was chalking up big economic growth numbers over the last two decades, it also became the world's biggest energy user and the largest emitter of greenhouse gases.

"We absolutely must not any longer sacrifice the environment for the sake of rapid and reckless roll-outs," he said. "We'll never seek economic growth rate and big size at the price of environment."

Lead fumes from an illegal battery factory poisoned more than 200 children in Anhui province, hospitalizing 23 in January, according to Xinhua. And a leak of acid-laced water into the Ting River in July killed enough fish to feed 72,000 residents for a year, Bloomberg reported.

Source : http://moneymorning.com/2011/03/01/...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules