Senior leaders at the National People's Congress, which opens on Thursday, will send an unambiguous signal about the extent of the slowdown when they cut this year's GDP growth target to around 7 percent, which would be the lowest growth in a quarter of a century.

 

"The focus will be on state-owned enterprise reforms, price reforms and fiscal⁴ reforms," said Wang Jun, a senior economist⁵ at the China Center for International Economic Exchanges, a well-connected think-tank in Beijing.

 

"The economic growth target will definitely be lowered. A target of 7 percent is more appropriate."

 

Officials are expected to argue that a lower growth target provides the opportunity to overhaul⁶ state firms, laws and the fiscal system.

 

They hope to transform the world's second-largest economy away from the export- and investment-led model that powered three decades of rapid expansion into one that is driven by more sustainable domestic consumption.

 

But with fears of deflation rising - annual consumer inflation plumbed⁷ a five-year low of 0.8 percent in January - there is also a need to step in to support the economy, evidenced by two interest rates cuts since late November.

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