Economists recommend 7% growth goal in 2015

An employee welds the exterior of a vehicle along a production line at a factory in Qingdao, Shandong province Dec 1, 2014. [Photo/Agencies]

China's top leadership will meet on Tuesday for a Central Economic Work Conference to map out economic and reform plans for the following year, The annual gethering may reiterate a prudent monetary policy.

The government last cut its annual growth target in 2012, to 7.5 percent from eight percent that it had kept for eight years.

"President Xi (Jinping) has already hinted at the growth target when he said growth of seven percent is the highest in the world," said a senior economist at the Chinese Academy of Social Sciences (CASS), who declined to be identified.

China's reform-minded leaders have shown greater tolerance for slower growth, but they will have to tread carefully to avoid a sharper slowdown that could fuel job losses and debt default risks, analysts say.

Economists expect policymakers to embark on their biggest easing campaign since the global financial crisis, forecasting a combination of more rate cuts and reductions in bank reserve requirements to encourage lending despite mounting bad loans.

The central bank surprised markets on Nov 21 by cutting interest rates for the first time in more than two years to shore up growth and lift some of the pressure off debt-laden companies.

Inflation seen easing too

Several think-tanks have also suggested the government lower its target on consumer inflation to around three percent from this year's 3.5 percent, given falling commodity prices.

"We suggested an inflation target of around three percent. On employment, we should aim for 10 million new jobs," said Zhu Baoliang, chief economist at the State Information Centre, a top government think-tank, adding that he recommended a quicker pace of reform in 2015.

The meeting, which sources said would run until Thursday, is unlikely to result in any public announcement of economic targets, which are usually reserved for the opening of the national parliamentary session in early March.

Reducing the growth target would be a natural reaction as Beijing moves to manage domestic expectations.

Top leaders could discuss ways to quicken economic reforms next year, including a fiscal overhaul to deal with the root cause of local government debt, and further financial market liberalization, the sources said.