China gears down for economic health

China's latest batch of disappointing statistics have done little to ease worries over a slowing economy.

A trade deficit of almost 23 billion U.S. dollars in February was the first since April 2013. The purchasing managers' index for the manufacturing sector dropped to 50.2 percent last month, an eight-month low.

"Declining economic data in the previous two months does not signify a systemic withering," said Zhang Liqun of the State Council's development research center.

Zhang believes that the downturn in momentum will be halted and China's economy will grow steadily to reach the 2014 target. Gearing down in development will bring a healthier economy overall.

The growth target this year, set out by Premier Li Keqiang at the annual parliamentary session last Wednesday, makes 2014 the third consecutive year with a goal of 7.5 percent. Li repeated the word "reform" 77 times in the report, so the message to analysts is crystal clear.

No country can sustain an economic boom forever, and China has realized yearly growth of more than 10 percent in gross domestic product (GDP) for over three decades, said Yu Bin, head of macro economics at the research center. Surging labor costs combined with pressure from green industries means a slowdown is unavoidable.

Each percentage point of GDP growth represented nearly 530 billion yuan (86.42 billion U.S. dollars) last year, 5.4 times the 98 billion yuan in 2000, Yu explained.

Sun Xuegong, deputy director of the economic research center at the National Development and Reform Commission, said that perennial growth had forced China to adjust its economic structure. Higher living standards demand higher quality products and services. Those demands are met through structural transformation and innovation.

Lian Ping, chief economist at the Bank of Communications, reckons that the 7.5 percent target will mean increased consumption and more exports.

Current gloomy expectations can be easily exaggerated, according to Zhang Liqun, especially in the capital market where sharp fluctuations represent investment opportunities.

The government work report delivered by Premier Li this year set lower growth targets for investment and exports but a higher employment goal. Increased employment will come through fast expansion of service industries as China's economic structure develops.

Participants in the ongoing sessions of the top legislature and political advisory body are optimistic that China is on a smoother path toward better quality of life for all.