China lowers economic growth target for 2015

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China lowers economic growth target for 2015

China announced a lower economic growth target for this year and promised to open more industries to foreign investors as part of efforts to make its slowing, state-dominated economy more productive.

The growth target of about 7 percent, down from last year’s 7.5 percent, was in line with efforts to create a “moderately prosperous society,’’ said Premier Li Keqiang in a report Thursday to China’s ceremonial national legislature. Actual economic growth last year was 7.4 percent, the lowest since 1990.

The ruling Communist Party is trying to guide the world’s second-largest economy to slower but more self-sustaining growth based on domestic consumption and services, replacing a worn-out model driven by trade and investment in property and polluting industries.

“We need to maintain a proper balance between ensuring steady growth and making structural adjustments,’’ said Li in the report to the National People’s Congress (NPC).

The annual full session of the NPC usually is limited to endorsing policy decisions already made by the ruling party but the meeting serves as a platform to publicize reform initiatives and set a tone for government work.

Li promised to give entrepreneurs and foreign investors a bigger role in an economy that after three decades of market-oriented reforms still is dominated by government-owned banks, oil producers and other companies.

Beijing will open service and manufacturing industries wider to competition by reducing by half the number of fields in which foreign investment is restricted, the premier said. He gave no details but said the government also will reduce the number of projects that require official approval.

China’s economic growth has declined steadily since peaking at 14.2 percent in 2007. Beijing has clamped down on construction and investment to cool a boom that generated millions of jobs but fueled worries about rising debt. Efforts to promote consumer spending have proceeded more slowly.

A key issue is the status of state companies that control industries including banking, telecoms, shipping, securities and oil and gas and benefit from subsidies, monopolies and other official favors. Reform advocates say they are a drag on development but the ruling party has yet to take significant steps to reduce their privileges.

Li gave no indication state companies will lose their favored status but said Beijing will encourage private investment in projects led by government enterprises. He did not say whether the outside investors would be given any voice in management.

Li also promised widely anticipated changes in China’s state-owned banking industry. He said qualified private investors will be allowed to set up small and medium-size banks, though he gave no details of who would be allowed to do that.

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