7 Mar 2012

China lowers growth target

8:04 am on 7 March 2012

China has lowered its official growth target from 8% to 7.5% - the first cut to the targeted growth rate in eight years.

It says it will attempt to step up domestic consumption to compensate for slowing growth in export markets.

Premier Wen Jiabao unveiled the target at the start of the annual National People's Congress.

BNZ economist Stephen Toplis says the announcement that China will pursue slower and less export-driven growth will have a variety of implications for New Zealand exports.

He said food exports should still do well, but goods that go into investment activity are likely to suffer.

China's economic growth has regularly outstripped its 8% targets, causing problems including high inflation and a widening wealth gap, the BBC reports.

Last year, its gross domestic product (GDP), or annual economic output, grew by 9.2%. In 2010 gross domestic product grew 10.4%.

The New Zealand dollar fell about a cent against the American currency. By 5.30pm on Tuesday it was buying US 81.47c.

Westpac senior market strategist, Imre Speizer, says he expects the rate of Chinese growth to slow in the first half of 2012, pushing the price of New Zealand's commodities lower and causing the kiwi to fall.