Last year, the National People's Congress passed the "12th Five-Year Plan" outline, setting the economic growth target for the "12th Five-Year Plan" period at 7%, slightly lower than the 7.5% determined in the "11th Five-Year Plan" outline. This year, the government work report adjusted the economic growth rate to 7.5%, marking the first time in eight years that China has lowered its economic growth forecast. In the past eight years, the expected economic growth target was consistently set at 8%.
Premier Wen Jiabao explained that this move aims to align with the "12th Five-Year Plan" targets and guide the focus of work towards transforming the mode of economic development, improving the quality and efficiency of economic development. Economic growth rate is one of the four major macroeconomic indicators, alongside prices, employment, and international balance of payments. The economic growth target is a forecast rather than a binding one [Feiyu Doors and Windows]. The forecasted economic growth target is not the same as the actual economic growth rate. From recent years' actual economic growth rates, they have all been significantly higher than the initial annual targets.
Commissioner Liu Shucheng reviewed the initial expected economic growth targets since the beginning of the new century. From 2001 to 2004, except for 2002 when no specific value was explicitly mentioned, the target was set around 7%. From 2005 to 2011, it was around 8%. This setting has a connection with the five-year plans; the average annual economic growth target in the "12th Five-Year Plan" was reduced by 0.5 percentage points compared to the "11th Five-Year Plan."
National People's Congress representative and Vice Chairman of the Financial and Economic Affairs Committee of the NPC, He Qiang, stated that this is a rational judgment made by the central government after comprehensively considering various domestic and international situations [Bailong Furniture Accessories (Shanghai) Co., Ltd.]. Because there are many uncertainties in the global economic recovery, external demand decreases during slow recoveries, and everyone realizes that we cannot rely solely on expanding investment to maintain growth. Additionally, due to slower income growth, consumer demand cannot expand significantly either. Therefore, blindly pursuing growth is irrational, and setting it at 7.5% is relatively reasonable.
He Qiang indicated that the 0.5% downward adjustment in expectations also sends a signal to local governments not to excessively chase GDP.
[Stabilizing Prices] Shifts to [Stabilizing Growth]
Compared to last year, the primary task of the government this year has changed. Last year, the government work report placed [maintaining price stability] as the top priority, while this year it is [promoting steady and rapid economic development], the same as the top priority from 2009 to 2010. However, maintaining price stability remains important, and this task ranks second in the government's work this year.
Why did the economic growth target decrease for the first time in eight years?
Vice Premier Wang Qishan of the State Council indicated that lowering the GDP target is aimed at transforming the development model and adjusting the structure.
[Since 2005, the annual expected economic growth target for China has been set around 8%, and this year marks the first time in eight years that it has been lowered.] Liu Shucheng, a member of the National Committee of the Chinese People's Political Consultative Conference and Deputy Director of the Economics Department of the Chinese Academy of Social Sciences, pointed out this significant change.
Regarding the GDP target being below 8% for the first time in eight years, Vice Premier Wang Qishan expressed that this is to achieve something in transforming the development model and adjusting the structure.
For this year's development, Wang Qishan stated that overall, the work tone is "seeking progress while maintaining stability", balancing the issue of development speed. With a GDP growth rate of 7.5%, this indicator has widely considered opinions because, given the situation, speed must be unified with structure, quality, and benefits—this is the transformation of the development model. That is, this year requires adjusting the structure, achieving goals scientifically, and still opening up, leaving some room in terms of speed.
PM2.5 Enters Government Work Report for the First Time
Different from previous environmental protection work deployments, PM2.5 entered the government work report for the first time this year, with Premier Wen Jiabao providing a monitoring timetable. He stated, "We will use our actions to declare to the world that China will never sacrifice ecological environment and people's health for economic growth. We can certainly take a civilized path of development characterized by production development, affluent living, and good ecology."
Unlike recent government work reports, Premier Wen Jiabao devoted a large portion of his speech this year to concentrating on reform tasks. He frankly said, "We must continue to comprehensively promote reforms in the economic system, political system, and other areas with greater determination and courage to solve development problems."
The reform content involves fiscal and financial systems, the common development of multiple forms of ownership economies, price reform, income distribution reform, institutional reform of public service units, and government reform.
Defense and the military are contents that every government work report mentions. Among the four government work reports since this session began, all have mentioned the ideological and political construction of the army, and this time it added "adhering to the fundamental principle of the Party's absolute leadership over the army and the fundamental purpose of the people's army."