China drops growth target to "about 7%"

From the AFR:

China has signalled a tightening in credit this year as economic growth slows to 7 per cent and the government pledges to smooth the path for foreign companies looking to invest in the world’s second biggest economy.

In his annual speech to parliament on Thursday, Premier Li Keqiang said inflation would increase to “around 3 per cent” while money supply or M2 would contract to 12 per cent.

“The difficulties we are to encounter in the year ahead may be even more formidable than last year,” he said.

I’ll take the under on both targets. Modestly for growth and moderately for M2, which is currently at 10.8%:

The property shakeout combined with capital flight will make credit very difficult to stimulate.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

China drops growth target to “about 7%”