(MENAFN- Qatar News Agency) China's economic growth is likely to stand at 7.6% this year, slightly down from 7.7% in 2012, said a State Council report on Wednesday.
Economic growth has been higher than expected since 2011 despite a declining trend, said a mid-term evaluation report on the implementation of the 12th five-year development plan (2011 to 2015)
The report was submitted by the State Council, China's cabinet, to the bi-monthly session of the Standing Committee of the National People's Congress (NPC), according to (Xinhua) news agency
The five-year plan set an annual growth target of gross domestic product (GDP) at 7% between 2011 and 2015
GDP growth was 9.3% in 2011, 7.7% in 2012 and 7.6% in the first half of this year, according to the report
"We cannot deny a downward pressure on economic growth," Minister in charge of the National Development and Reform Commission (NDRC) Xu Shaoshi said, when briefing lawmakers about the report
There are uncertainties in global economic recovery and the international market has failed to produce strong demand, Xu said
At home, labor cost increases and environmental costs to enterprises are catching up, which challenges the traditional growth pattern, he said
The economy is also challenged by increasing risks in local government debt, the financial sector and overcapacity, which resulted from blind government investment in industrial projects. Investing a large amount of funds in low-profit infrastructure projects, industries with excess capacity and real estate projects has reduced liquidity and efficiency, Xu said. The report also listed several other challenges ahead, including slow economic restructuring, worsening pollution and social conflicts among interest groups. The State Council said the solution is comprehensive reform in various sectors to realize the market's decisive role in allocating resources and improve government performance. To avoid big economic fluctuations, China will further enhance the flexibility of interest rates and coordinate fiscal, monetary, industrial, land use and environmental policies, according to the report, and carefully handle local government debt while ensuring reasonable needs for liquidity, the report said. The government will continue cutting excess capacity in industries like steel, cement, electrolytic aluminum, glass and shipbuilding and stop the expansion of high energy user and high polluters. To balance the development of regions, the government will work to remove market barriers across the country and reform public services that are tied to household registration.
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