By TraderVox.com
Tradervox.com (Dublin) – China is expected to maintain an annual economic growth rate of 7.5 percent next year as speculation the leadership of Xi Jinping will not tolerate slower growth rate. The 7.5 percent growth rate is the lowest goal that has been set by the country since 2004. This comes as a boost to the Australian and New Zealand dollars which are the biggest trading partners for China.
According to survey of world economists, most of them expect the Chinese government to keep its target unchanged in 2013. Top economic officials in the country are meeting this month to draft policies that will guide the nation in 2013. The decisions that will be set will be announced in March during the annual session of parliament. Economists have indicated that the 7.5 percent target signals the Xi and Li Keqiang are prepared to expand monetary easing if China economic recovery fails to bring the required results. The sentiments came after a gauge of manufacturing rose to the highest in seven months in November according to the data released on December 1. This signals that growth has rebounded from three-year low.
According to Li Miaoxian, an economist in Beijing at Bocom International Holdings Co, which is an investment banking unit of the Bank of Communications Co, indicated that the manufacturing gauge sends a clear signal from the new leadership that they are willing to do everything to keep economic growth stable. He indicated that changing the target to seven percent would be too low and would cause the market to worry.
China, which is the largest trading partner for Australia and the second largest for New Zealand affect those countries’ currency strength. The improved growth in manufacturing sector has boosted the demand for commodity related currencies. Li said the policy makers in China will ensure a target of 7.5 percent which might lead to increased growth above 8 percent.
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