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          China lowers GDP target for quality growth

          Updated: 2012-03-12 14:49

          (Xinhua)

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          The lowered target has also given full consideration to the domestic consumer price level.

          Economic growth speed usually contradicts price level. As the history of China's economic development has shown that it is not rare for the prices to skyrocket as the result of the sizzling economic growth. However, to keep the prices down excessively would risk putting the economy at a standstill.

          According to the work report, the Chinese government set the full-year inflation control target for 2012 at 4 percent, unchanged from the target in 2011. It said China will maintain steady and robust economic development while keeping the consumer price level stable.

          "In projecting a CPI increase of around 4 percent, we have taken into account imported inflation, rising costs of factors of production, and people's ability to absorb the impact of price increases, while leaving room for the effect of price reforms," Wen said.

          Liu Shucheng, an economist with the Chinese Academy of Social Sciences, said the lowered target would help maintain a stable price level.

          "The government is seeking a balance between economic growth and inflation and keep them both at a stable level," said Wang Yiming, deputy director of Macroeconomic Research Institute of the National Development and Reform Commission.

          “Setting high growth target would increase inflationary pressure,” Wang noted.

          The consumer price index (CPI), a main gauge of inflation, increased 3.2 percent year-on-year in February, its lowest pace in 20 months, the National Bureau of Statistics said Friday.

          Ma Jiantang, director of the National Bureau of Statistics, on Monday said he expected inflationary pressure to ease a little as the economy slows this year, but he warned of a resurgence in inflation if the problem is not taken seriously.

          "Potential factors such as rising labor costs that push up prices are still there," said Ma. "If not properly controlled, the inflation potential will turn into real risks for our economy."

          Premier Wen pledged in the report that the government will continue to implement a proactive fiscal policy and a prudent monetary policy this year.

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