China could afford to cut its 2015 economic growth target to 7 per cent and still keep its labour market healthy, the World Bank said today, even as it urged Beijing to refrain from setting rigid growth objectives, Reuters reported.
"Our policy message is the focus should be on reforms rather than meeting specific growth targets," Karlis Smits, a senior economist at the World Bank office in Beijing, told reporters at a media briefing.
Smits said, "In our view, an indicative target of around 7 per cent for 2015 would meet the kind of indicative growth that is needed to maintain stability in the labour market."
Thirty years of breakneck, double-digit economic expansion had helped millions emerge from abject poverty. But it also polluted the nation's air, land and waterways. Now China intends to redirect its economy for slower but better-quality growth.
China had targeted around 7.5 per cent growth this year, but many analysts expect annual growth to hit 7.4 per cent, the lowest in 24 years.
Both the government and the central bank had rolled out initiatives to avert risks of a sharper slowdown. Under a sweeping reform plan that is the country's most ambitious in 30 years, China aims to overhaul the economy to allow market forces supplant central state planning.
Meanwhile, AP reported the Washington-based lender advised Beijing to promote competition and efficiency by reforming its labour and real estate markets and its state-run financial system, in order to to avoid a sharper slowdown.
Smits said trying to stick to short-term official targets might set that back by prompting officials to pump credit into the economy and disrupt the development of markets.
According to commentators, the World Bank report added to the pitch of reform advocates want the government of president Xi Jinping to move ahead with ambitious plans to give entrepreneurs and market forces a bigger role in the world's second-largest economy.
Beijing, however, had launched mini-stimulus measures through higher spending on construction of railways and other public works, prompting warnings it was setting back efforts to give market forces a bigger role.