China's acceptance of a slower rate of growth rattled markets on Monday, but it creates space for structural reforms and will help manage expectations, says an article on reuters.com. Excerpts:

Oil, copper and equities all fell after Premier Wen Jiabao, in his annual work report to the National People's Congress, penciled in 7.5 percent growth for 2012. That would be the slowest pace of expansion since 1990 and well down on last year's 9.2 percent growth rate.

Ditching the 8 percent reference rate for growth set for the previous eight years is more about managing expectations than reflecting a serious lack of confidence in the economy's prospects, said Steve Tsang, director of the China Policy Institute at Britain's Nottingham University.

Indeed, China's five-year plan for 2011-15, released a year ago, was based on an even lower growth rate of 7 percent, shifting down from the annual pace of almost 10 percent enjoyed in the first 30 years of China's growth.

"What the authorities are trying to do is to move from strong to sustainable rates of growth. No one is quite clear where sustainable is, but clearly it's one that's slower than we've seen in the recent past," said Gerard Lyons, chief economist at Standard Chartered Bank in London.

"The 7.5 percent target is a signal meant to lower expectations and create space for structural reforms," Jeremy Stevens, an economist in Beijing for South Africa's Standard Bank said. "Markets may start off unimpressed, but these are steps in the right direction."

(China Daily 03/08/2012 page10)