Quotes from TD Economics:
- Yesterday evening, China lowered its economic growth target for 2015 to "around 7.0%" as it heads for a "new normal" for growth. This is the first time since 2005 that the target falls below 7.5%, and if the target is realized, would mark the slowest pace of growth in China since 1990.
- This was not the only decision taken in China this week, with the People's Bank of China announcing a cut to its benchmark interest rates last weekend. The cut follow several other monetary policy moves over the past year aimed at supporting the economy as it slowly decelerates.
- Even hitting this lower growth target will be a challenge as China grapples with a declining property market, with knock-on effects on local government finances. Reforming its economy to be less dependent on credit-fuelled investment while ensuring a still lofty pace of growth will be akin to walking a tightrope for central government authorities. All things considered, there are downside risks to Chinese growth for this year, posing another headwind for a number of emerging markets.
