How will "2 sessions" set tune for China's economy

The global economic outlook remains gloom with the stagnant U.S. economic recovery and the spiraling Eurozone debt crisis, and China's economy will thus see slower growth this year due to waning external demand. Given the daunting internal and external environment, how China's "two sessions" set the tune for Chinese economy will certainly draw domestic and international attention. Analysts said that stabilizing growth, expanding domestic demand, controlling inflation and boosting real economy will be the buzzwords in the discussions during the National People's Congress (NPC) and National Committee of the Chinese People's Political Consultative Conference (CPPCC) sessions. The forecast for annual GDP growth made at the "two sessions" has always been a focal point. In 2011, China's GDP expanded by 9.2% against the backdrop of the sluggish global economy and complicated internal and external situation. However, Chinese economy has shown signs of slower growth since the very beginning of 2012. Many local governments' legislature's plenary sessions have unleashed signals of slowing down. Beijing has set the annual growth target of 8%, the slowest in the country, while relatively developed provinces in east China, such as Guangdong, Jiangsu and Shandong, have all lowered their growth targets. Zheng Xinli, permanent vice chairman of China Center for International Economic Exchanges, said that China's downward trend in economy can be attributed to its own initiatives and external factors, with the former including tight regulation on property market and economic restructuring and the latter including weakening external demand, imported inflation, etc. Given the slowing momentum, China's GDP growth, which is closely related to the livelihoods of millions of Chinese people and serves as the locomotive of global economic development, will catch people's attention more than ever. Business magnate George Soros said at the World Economic Forum in Davos that China would not be able to sustain its growth rate of above 8% this year as a result of diminished export due to the Eurozone debt crisis. Li Daokui, a member of the monetary policy committee of the People's Bank of China (PBOC), said, "China’s economy will see a soft landing in 2012 and the annual growth rate will be no less than 8.5%." Although the forecasts differ, a slower growth has been an agreed view. Compared with the double-digit growth in the past few years, some analysts said that a slower growth means that overheating risks will be eased, thus making the growth more rational. Professor Niu Wenyuan from Chinese Academy of Sciences, also a CPPCC National Committee member, said that China should pursue "good-quality GDP" by reducing environmental and social costs. Analysts from the National Bureau of Statistics (NBS) predicted that China may face a tough year as affected by the sovereign debt crisis in Europe. Wei Jianguo, secretary-general of the China Center for International Economic Exchanges, said that China's trade will record a single-digit growth in 2012, with export sliding gradually, but it would be the best time to restructure foreign trade. "China is at the development stage of important strategic opportunities with the urbanization and an aging population bringing new investment channels for emerging industries," said Yao Jingyuan, a special researcher with the Councillor's Office of the State Council As to how to spur consumption, Yao believed that the key lies in reforming the distribution system in an effort to increase people's income. He also noted that China's reliance on foreign trade has dropped from 57.3% in 2008 to 50.1% last year.