Australian Prime Minister Tony Abbott (C) talks to Chinese President Xi Jinping (R) before a meeting at the Great Hall of the People in Beijing, April 11, 2014. REUTERS/Parker Song/Pool
IN PHOTO: Australian Prime Minister Tony Abbott (C) talks to Chinese President Xi Jinping (R) before a meeting at the Great Hall of the People in Beijing, April 11, 2014. Reuters/Stringer

The World Bank in a report warned China that it should not push its "ambitious" economic growth target of 7.5 percent of the current year to the next year, saying it will hurt the government's reform plans.

China had recorded the slowest growth in this September quarter, ever since the global financial crisis broke out. As a result, many analysts are predicting that China may miss its official growth target of 7. 5 percent and that will be the first time in 15 years. However, the World Bank expects the Chinese economy to grow by 7.4 percent this year and that will be the slackest in 24 years. It seems the rumblings in the September quarter that made World Bank to caution China against pushing a similar growth agenda for next year.

"There is a concern that the economic climate for meeting ambitious growth targets in the next year would require attention to macroeconomic policies to support domestic demand and that will deflect the focus on reforms," the WB report said.

China's three -decades long double-digit economic expansion lifted millions of Chinese people from poverty but there were after effects in terms of damage on the nation's air, land and waterways. Now China is contemplating to tone down the pace towards better-quality growth shunning the rush mode. To provide more space to market forces over state planning, China must abandon frenzied economic growth rates, is the bottom line of World Bank's message to China, Reuters reported.

Concentrate on Reforms

The World Banks's counsel was evident at the press briefing by Karlis Smits, a senior economist at its Beijing office, who told media briefing that"we would like to give a policy message that there be more focus on reforms than chasing specific growth targets". The economist noted that a target growth rate of around 7 percent is fine for 2015 and it can meet the growth required to maintain stability in the labour market.

Already the property market is sliding as investment growth is waning, making the Chinese economy undergo a rough ride this year, despite many steps taken by the government and the central bank in terms of support measures to avert a sharper slowdown.

Property Downfall

China's slowing housing market has been a matter of concern and economists see it as becoming the biggest risk. The World Bank has predicted further crash in property prices in the months to come due to an over-supply of homes. Many of the big cities such as Beijing, Shanghai, Guangzhou and Shenzhen are seeing doubling of home inventory levels since the start of 2013.

Even though analysts argue for advancing reforms to power its future economy, the World Bank cautioned against expecting any fancy growth as the reforms driven new growth will not be as potent as it was in the past. However, the World Bank is confident that new reforms in China, if they are to be sustained for five years, will raise its growth potential by a total of 3.5 percentage points.

Meanwhile, the Wall Street Journal reported that the World Bank also praised Beijing's success in tightening credit growth and in reducing excess capacity and in taking many measures in curbing pollution.