Chinese plenum sets up new long-range growth plan

Oct 29, 2015, 08:30 am

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By Hong Soon-do, Beijing correspondent, AsiaToday - China has entered an era of growth rate under 7%. If there aren't any special changes to come in the future, the era of 7% growth would never come again. In short, China is seemingly bowing farewell to the era of rapid growth.
Chinese media outlets covering the opening of the fifth plenum of the 18th Chinese Communist Party Congress. As the meeting has been finalized on Thursday, China is expected to lower its GDP growth target to 6.5% from the prior 7%./ Source from search engine Baidu

Considering the result of the fifth plenary session of the 18th Communist Party Central Committee, which ended on Thursday, such assertion is not an exaggeration. According to the Oct. 28th reports of Chinese state media outlets including Xinhua News Agency, the party has actually given up its official economic growth target of "about 7 percent" and set a new target of about six percent. To be more accurate, the new annual target rate is 6.5% .

In fact, such decision was inevitable for China considering the country's economy that accounts nearly $11 trillion. If China achieves 7% growth, there will be definitely talks about bubbles. Besides, Chinese economy is in the position where it has to seek quality rather than sheer size. The announcement of "new normal", which means more realistic and sustainable expansion with emphasis on the quality of growth, is in the same context.

The fact that China set a new target of about six percent means there will be restructuring for a considerable period of time. China's steel and energy industries, that are currently in oversupply, need restructuring.

If this is the case, Korea is likely to suffer greatly as its economy heavily relies on the Chinese economy. In fact, Korea's economy has actually fell nearly 0.2% when China's economy growth dropped 1%. This is why Korea should consider plans for this immediately.

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