* Premier Li to unveil growth, reform priorities in work
* Li likely to downplay pace of growth in favour of reforms
* But he is expected to stick with 7.5 pct growth for 2014
* Market sees yuan band widening, deposit insurance imminent
By Kevin Yao
BEIJING, March 5 China will unveil key economic
targets and reform priorities for 2014 at the start of an annual
parliament meeting on Wednesday, and expectations are that
Beijing will stick to gradual changes to avoid an economic
Last November, at a plenum meeting, the ruling Communist
Party announced the boldest set of economic and social reforms
in China in nearly three decades, but implementation is yet to
fully take hold.
Premier Li Keqiang addresses the National People's Congress
at the start of the nine-day session, and investors will be
watching his speech for clues on what lies ahead for the world's
He is likely to provide an economic growth forecast for
China in 2014, and analysts have said maintaining last year's
target of 7.5 percent, as he is likely to do, will give room for
policy-makers to drive reforms.
Policymakers are aware that an abrupt slowdown resulting
from a rebalancing of the economy, and job losses and
bankruptcies, could derail the reform agenda.
"Anyone hoping for a re-run of the excitement around last
year's third plenum will be disappointed," Mark Williams and
Qinwei Wang at Capital Economics in London wrote in a note.
"Nonetheless the congress should at least give us a better
sense of the government's priorities and objectives for the
rest of the year."
Some analysts believe there is an off chance that Li could
stop issuing an explicit growth target this year, to
underscore the importance of economic reforms.
Others say he may stop referring to a "target" in economic
growth, instead using "projection" or "expectation" to give more
wiggle room for the government.
Li, China's first premier with an economics doctorate, has
vowed to push painful changes "like a warrior cutting his
wrist", but signs of fragility in the economy suggest reforms
will be cautious and gradual.
Economists involved in drafting the reforms say that plans
that can be implemented without affecting growth or jobs are
high on the agenda.
Among the less controversial reforms, the central bank could
unveil a long-awaited deposit insurance system in coming months,
a step toward its declared goal of freeing up bank deposit
rates, and it may also widen the yuan's trading band
to encourage international usage of the currency.
Analysts say some changes, such as government downsizing or
closures of debt-laden factories, could take a back seat to
avoid fuelling job losses and undermining social stability.
Investors could get a sense of how much of a growth slowdown
the government is willing to tolerate from the annual budget,
which will also be announced on Wednesday.
The People's Bank of China under reform-minded Governor Zhou
Xiaochuan is widely expected to maintain its efforts to contain
elevated debt levels in the economy amid jitters of financial
During the parliament meeting, key government ministries and
the central bank will hold a series of press briefings to cover
a wide range of economic and social issues.
Li is scheduled to hold a news conference at the end of the
parliament meeting on March 13.