China is likely to set a lower economic growth target during its upcoming annual parliamentary sessions as it focuses on quality rather than quantity in its growth.
China's gross domestic product (GDP) growth rate clocked in at 7.4 percent last year, the weakest in 24 years and lower than the 7.5-percent target.
Experts have said that a lowered growth target for this year is in line with the reality China faces -- weakened domestic consumption and uncertain external demand -- and gives more leeway for economic transformation and upgrading.
No GDP obsession
Most of the country's provinces and municipalities have lowered their growth targets for 2015. Shanghai even ditched the GDP target altogether, replacing it with the words "ensuring stable economic growth".
"As the Chinese economy has entered a 'new normal' that highlights restructuring and upgrading, lowering the growth target is necessary," said Zhang Liqun, a researcher with the Development Research Center of the State Council.
A string of recent economic indicators, including manufacturing and trade data, all suggest downward pressure.
The manufacturing purchasing managers' index (PMI) posted at 49.8 in January, suggesting contraction of factory activity in China. The producer price index (PPI), which measures inflation at the wholesale level, extended the run of decline to 34 months.
Exports, one of the China's three main economic drivers along with investment and consumption, declined 3.2 percent in January. Housing prices in the majority of 70 sampled cities fell in the month.
However, these poor performances should not be grounds for pessimism, according to Yao Jingyuan, a researcher with the Councilor's Office of the State Council. "They are necessary pains for China's economy to ascend to a higher level," Yao said.
"Against the backdrop of China's economy entering its 'new normal' period, setting a lower growth target not only gives people confidence that it can actually be reached; it signals the government's commitment to deepening reform and improving economic quality."
New growth drivers
While the power of old economic drivers are waning, new drivers such as the Internet economy and private investment are emerging.
China added 3.65 million new registered enterprises in 2014, up 46 percent. By the end of last year, there were 250 million people in the private economy, up 15 percent from 2013.
On the policy front, the government has been determined to streamline administration and improve efficiency. More and more approval authority has been delegated to lower government levels to cut red tape.
Moreover, there has been much promotion of grand initiatives such as the "Belt and Road" network of Asian trade infrastructure and the Yangtze River economic belt, both of which promise vast potential for China to digest overcapacity and create jobs.
Premier Li Keqiang has spoken of the "great vitality" that can be unleashed if "the people's passion for innovation can be activated in a country with a population of 1.3 billion."
"It serves as an inexhaustible fortune for China when more and more people start their own business and come up with new ideas," Li said.