China will maintain its economic growth target for 2014 at about 7.5 percent, as expected, signaling that its policy focus would be slanted in favor of reforms and rebalancing the economy.
Premier Li Keqiang, in a report to the National People's Congress at the start of its annual session on Wednesday, also said military spending will increase by 12.2 percent.
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- 2014 growth target set at about 7.5 percent
- China to make domestic demand main growth engine
- 2014 CPI target set at about 3.5 pct
- Total trade expected to increase 7.5 pct in 2014
- 2014 Budget deficit seen at 2.1 pct of GDP
- China to continue with exchange rate reform
- China to extend yuan floating rate
- Military spending to increase by 12.2 percent
SURESH KUMAR RAMANATHAN, HEAD OF REGIONAL INTEREST RATE AND
FX STRATEGY, CIMB INVESTMENT BANK, KUALA LUMPUR:
On whether China indicated it would widen the yuan's trading band: "Yes it is obvious, and it's likely to occur within days or weeks.
"It will affect negatively for Asia ex-Japan, given the CNY is on a weakening trend the last few weeks.
"It will also mean that taking for granted a CNY appreciation ... is no more. Currencies in Asia will remain weak on this, particularly, MYR, IDR, PHP, TWD.
"Naturally to hit that growth target, the CNY must weaken first.
"Only then, we have spillover effects of the 7.5 percent into the rest of Asia."
(Reporting by Jongwoo Cheon in SINGAPORE; Editing by John Mair)