China’s top government and party brass will reportedly meet this week for the annual central economic work conference, which sets the economic agenda for the year ahead.
The lead-up to the conference included President Xi Jinping’s appearance at a seminar last month to discuss economic issues with non-party members. According Xinhua, Xi was not optimistic about conditions in 2014.
It would be no surprise then if the conference ends with a cautious outlook for economic growth next year. Speculation is high that the national target for gross domestic product expansion may be cut again to 7 percent in 2014, from 7.5 percent this year. If that is the final number, it will be China ’s slowest growth since 1990.
But a bit of cooling in the economy could be a blessing. The Economic Information Daily quoted a Renmin University economist as saying that Beijing is very likely to embark on some tough reforms in 2014, including market-based pricing of water, electricity, gasoline and natural gas.
Minimizing government intervention on those essentials will inevitably lead to increases in prices and the consumer price index. But a timely slowdown in broad economic growth will cushion the economy from the bumps in headline inflation.
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