However, China is still a developing country and development is the key to solving many issues in the country, so we must hold fast to economic construction and maintain a reasonable economic growth rate. The GDP growth target of 7.5 percent considers the development needs of the country and is linked to the goals of building a comprehensive well-off society in the future and optimizing the economic structure.
At heart it aims to maintain the employment level, which is one of the important indexes to measure the economic operation and verify the stability of the economy. The pressure test of the global financial crisis in 2008 and 2009 showed that when GDP growth declined to less than 7 percent, there were problems in the job market. So the lower limit of 7.5 percent growth rate is actually set to ensure stability in employment.
However, with the deepening of economic restructuring and the development of the service industry, the absorptive capacity of the job market will gradually strengthen, so even if the GDP growth rate is lower than the 7.5 percent target, the employment level can still be guaranteed.
To sum up, in order to realize the goal of steady growth, it is important to keep a reasonable economic growth rate, so the government's "reasonable range" is just like an instrument panel on the economic locomotive. Without a certain speed, we will have no material basis for creating more jobs, increasing incomes and improving people's livelihoods, not to mention raising the quality of economic growth.
Some people believe even slower economic growth will be good for pushing forward the necessary structural adjustment of the economy, but in reality, it is not a case of the lower the growth rate the better. Once the economy slows through inertia, the lack of confidence in an economic upturn will form a vicious circle, whereby not only will restructuring not be effectively promoted, but the economic fundamentals will be harmed to such an extent it will be difficult and more costly to restart the economy.
Therefore, we should neither blindly stimulate the economy, nor let the economy slow beyond the reasonable range. Only by better understanding the reasons behind the range and the national economic strategy of steady growth, can suitable policies and measures be applied to provide strong support for economic restructuring and its healthy and sustainable development.
The article was first published in Study Times.
(China Daily 03/14/2014 page11)
