Date
21 October 2017
China must get rid of rigid growth objectives as it pursues reforms, says the World Bank. Photo: Bloomberg
China must get rid of rigid growth objectives as it pursues reforms, says the World Bank. Photo: Bloomberg

China must focus on reforms, not growth targets: World Bank

The World Bank warned China against carrying its “ambitious” 2014 economic growth target of 7.5 percent into next year, saying that such a move would detract from the government’s reform plans, Reuters reported.

In its China Economic Update, the World Bank said the world’s second largest economy can cut its economic growth target to 7 percent next year without hurting its labor market, according to the report.

At the same, the bank urged Beijing to get rid of rigid growth objectives. 

“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, was quoted as saying at a media briefing.

“In our view, an indicative target of around 7 percent for 2015 would meet … the kind of indicative growth that is needed to maintain stability in the labor market,” he said.

On China’s slowing housing market, the World Bank predicted that property prices could fall further in coming months due to an over-supply of homes.

“Excess inventory will depress housing prices over the next few quarters,” the bank said, adding that any policy response is constrained by the fact that the housing market needs to undergo some long-term structural adjustment.

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RC

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