China's growth target in 2015 feasible

BEIJING - China can achieve its economic growth target set for 2015 thanks to a package of measures aimed at stabilizing growth and boosting the world economy, Yu Bin, a researcher with the Development Research Center of the State Council, forecast on Friday.

The official growth target was set at around 7 percent by the Chinese government in March at the annual session of the National People's Congress.

Speaking at a routine briefing on government policies, Yu said China's economic growth is maintaining its momentum despite slowing.

Consumption is contributing more to China's economy although investment growth has declined, said Yu. Consumption contributed 51.2 percent to gross domestic output (GDP) growth last year, three percentage points more than the previous year.

China's economic rise over the past two decades relied on enormous capital investment and exports backed by a huge, cheap labor force, but that can't last forever.

To steer the economy onto a more sustainable track, the government has been at pains to drive more domestic consumption, rather than over-relying on investment and exports.

Yu believed the service sector will play a part helping growth.

Data from the National Bureau of Statistics (NBS) showed that the country's service sector represented 48.2 percent of China's GDP in 2014, up 1.3 percentage points from a year earlier.

The global economy as a whole is getting better, Yu says.

Hopefully this year will be better than last year as the European Central Bank announced its quantitative easing program in March and the US Federal Reserve is likely to raise the interest rates.

Confronting the downward pressure, it is crucially important to strengthen rebalancing efforts.

Yu Bin forecast China's retail sales will grow 11 percent year on year in 2015, a slight slowing from the 12-percent annual gain seen in 2014, which he said would be attributable to sluggish property and auto sales.

A Moody's research note in January estimated property sales in China will decline by up to 5 percent in 2015, compared to a 7.8 percent decline in 2014.

China's auto sales growth slowed in the first quarter this year, according to data issued by the China Association of Automobile Manufacturers on Thursday. The 3.9 percent year-on-year growth marked a significant deceleration from the 9.2 percent rise in the first quarter of 2014 and the 6.9 percent increase for the whole of 2014.

Latest NBS data shows China's consumer price index, the main gauge of inflation, grew 1.4 percent year on year in March. The reading remained the same as in February, when it rebounded from January's 5-year low of 0.8 percent.

Despite stabilizing consumer inflation, the world's second largest economy may need further loosening measures, economists said.