Asia Briefing: China finance chiefs at Congress warn against obsession with growth targets

The Chinese government set an economic growth target for the year of 7.5 per cent at the country’s annual parliament last week, and since then the debate has focused on what will happen if that goal is not met.

The National People's Congress (NPC) is largely a formality, where nearly 3,000 delegates gather in the Great Hall of the People, to give rubber-stamp approval to policies decided behind closed doors by the Communist Party elite months earlier.

But it gives a useful insight into the economic and policy goals of the leadership for the year despite its ceremonial nature, and there is particularly keen attention given to the words of the premier, who is usually charged with dealing with economic matters.

Premier Li Keqiang said reforms were the "top priority" for the government and had entered "a critical stage".

He told the gathering that “painful structural adjustments need to be made” in China’s development, and forecast growth this year of 7.5 per cent, in line with expectations, while vowing to keep inflation at around 3.5 per cent and create 10 million more urban jobs to ensure the registered urban unemployment rate does not rise above 4.6 per cent.

Finance Minister Lou Jiwei warned against obsessing about the 7.5 per cent growth figure, and called for a more comprehensive understanding of the target.

His remarks have been read as a sign of a new flexibility, contingent on the labour market staying stable.

“Whether the final reading is at a touch more or less than the 7.5 per cent target is not that important. Employment is the key,” he said, adding that growth of 7.3 per cent or 7.2 per cent can still be counted within that range.

Capital Economics said in a report: "Our sense is that policymakers are thinking differently and are less likely to deliver a knee-jerk response to a slowdown in growth than in the past."