China May Keep 7.5% Growth Target as Manufacturing Gains

China may maintain its annual economic growth target at 7.5 percent next year in a sign the new leadership headed by Xi Jinping won’t tolerate a bigger slowdown from the lowest goal since 2004.

A goal of 7.5 percent would signal that Xi and Li Keqiang, set to succeed Wen Jiabao as premier, are prepared to expand fiscal and monetary easing should China’s nascent economic recovery falter. A manufacturing gauge rose to a seven-month high in November, data released Dec. 1 showed, adding to evidence growth is rebounding from a three-year low.

Li forecast a target of 7.5 percent, which he said would probably lead to actual growth higher than 8 percent and allow the government to be “more accommodative” in its economic policies than it could with a 7 percent goal.

Economic Recovery

The increase in November’s official manufacturing Purchasing Managers’ Index to 50.6 underscores optimism the economy is recovering after a seven-quarter slowdown. A gauge of new orders rose to its highest level since April and the output reading was the highest in six months, according to the report from the National Bureau of Statistics and China Federation of Logistics and Purchasing.

Baoshan Iron & Steel Co., the nation’s biggest publicly traded mill, said Nov. 12 that it would raise prices for most cold-rolled products for December delivery, the first increase for three months.