8% growth target within reach amid crisis: China

Written by Bloomberg | Updated: Mar 1 2009, 04:09am hrs
China said its 8% growth target for this year is within reach even as the worst financial crisis since the Great Depression hammers economies worldwide.

Liu Tienan , vice chairman of the National Development and Reform Commission, restated the goal at a briefing in Beijing today and said China has the conditions and the confidence to meet it.

Falling export demand has slowed Chinas growth to the weakest pace in seven years, cost the jobs of 20 million migrant workers and prompted a 4 trillion yuan ($585 billion) stimulus plan. Morgan Stanley predicted last month that the growth target could be cut and deputy commerce minister Zhong Shan said February 20 that it may be reviewed at the legislatures annual meeting, starting in Beijing next week.

Keeping growth at or near eight percent this year shouldnt be that difficult with all the investment that is planned, said Ken Peng , an economist with Citigroup Inc. in Shanghai. If the trade environment remains horrible next year or even after, China will face more difficulties. Liu said the financial system was healthy, the nations economic fundamentals were unchanged, and the economy had shown some positive signs.

China will massively increase government investment in 2009 as it targets stability, the partys top decision making body, the Politburo, said February 23. It didnt say whether spending would be in addition to the amount previously announced.

The stimulus plan, running through 2010, may be doubled, creating an investment boom, as the central and provincial governments start extra spending programs, Sun Mingchun , an economist with Nomura International, said February 25.

The International Monetary Fund forecasts Chinas economy will expand 6.7% in 2009 from a year earlier, the least since 1990. While China is the only one of the worlds five biggest economies still growing, the pace has slowed from 13% in 2007 and 9% last year. The economys expansion was 6.8% in the fourth quarter of last year as trade collapsed and the property market sagged.