12/29/2014, 00.00
CHINA
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For the first time, China will not meet five-year plan targets

Trade and investment goals set out in the 2011-2015 plan will not be met. For Chinese economists, the decision by Chinese policymakers to boost quality is behind the trend. For international experts, the very concept of five-year plans is outdated and unworkable.

Beijing (AsiaNews) - For the first time in the history of Communist regimes, China might miss the goals set out in the current five-year plan (2011-2015).

For Chinese economists, in addition to the ongoing international economic crisis, the reason for this is the decision by policymakers to emphasise quality over pace of growth.

Other analysts believe that the principle of five-year plans is outdated and impossible to implement because it does not take account macroeconomic fluctuations.

Commerce Minister Gao Hucheng said that trade in goods should increase by 3.5 per cent this year and services trade should rise by more than 10 per cent.

Non-financial foreign investment into the mainland is set to reach US$ 120 billion whilst outward investment is expected to top US0 billion.

These huge figures were initially included in a report published on the ministry's website on Saturday but have been removed since.

According to the 12th five-year plan, Beijing aims for US$ 4.8 trillion in total trade next year, which represents an average annual growth rate of 10 per cent in the five years since 2011.

It also targets an average annual inward foreign direct investment of US$ 120 billion and total outward investment of US$ 560 billion during the five year period.

"These targets now look impossible to reach and this year is a turning point," Shen Jianguang, chief China economist at Mizuho Securities, told the South China Morning Post. "The leaders' emphasis on 'new normal' growth means these targets are no longer a must to achieve."

Policymakers, now working on the next five-year plan, are expected to set lower targets to improve the efficiency of economic growth, Shen said.

As fresh evidence of the economic slowdown, the mainland reported a 4.2 per cent drop in industrial profits last month from a year earlier, the biggest fall since August 2012, adding to pressure for the central bank to ease monetary conditions further.

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