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The contradiction at the heart of China’s new growth target

First published: The Financial Times, 12/03/2015

For a longer version of this article please visit my Viewpoints blog:

China set a lower growth target of “about 7 per cent” at last week’s session of the National People’s Congress. It was a signal that, while the double-digit growth years may be over, Beijing remains confident that the world’s biggest economy will continue to enjoy healthy rates of expansion. The truth is that outcomes will more likely be determined by an important contradiction in economic development strategy than any official pronouncements.

According to a report presented by Premier Li Keqiang, China needs to find the “right balance between managing debt and maintaining steady growth”. At first this seems sensible enough; in reality there is a fundamental inconsistency between the objectives….“more:”