CHINA will continue to pursue a quality economy driven more by consumption than by exports or investment to leave more leeway for economic restructuring, Premier Wen Jiabao said yesterday.

The government is eying a growth target of 7.5 percent this year, Wen told the opening session of China's top legislature, the National People's Congress.

It was the second consecutive year China had set the target at this level, well below the double-digit rates of the past decade but in line with the country's plans to steer away from a reliance on trade and investment to drive growth.

The country will also try to manage inflation at under 3.5 percent, compared to last year's 2.6 percent.

"The target is based on the demand for a reasonable economic expansion to sustain employment growth and uphold people's livelihoods, while shifting the focus to improving the quality of the economy," Wen said.

"In light of comprehensive considerations, we deem it necessary and appropriate to set this year's economic target at 7.5 percent, which requires arduous efforts to realize," Wen said as he delivered his final government work report as premier.

The country is also aiming to create more than 9 million new urban jobs this year to make the registered urban unemployment rate 4.6 percent or below, and the government will allocate around 1.2 trillion yuan (US$190 billion) for fiscal deficit, 400 billion yuan more than a year earlier.

The government will work to ensure that the per capita income of residents rises in line with economic growth, and that rural development will match that of cities, Wen said.

He said inflationary pressure remains high due to the rising cost of land and labor, and it may be exacerbated by the loosening monetary policies adopted by major developed countries.

There remain quite a few problems in China's economy concerning its sustainability, balance between economic growth and its structure, as well as the cost to the environment, Wen said, promising the government will answer people's concerns and address these problems responsibly.

Wen said the profound impact of the global financial crisis, as well as the unstable recovery of the world economy, were major threats to China's economic growth.

He said the government should carry out urbanization "actively yet prudently," restrain the size of large cities and drive the development of their surrounding areas.

He noted that small- and medium-sized cities, as well as small towns, should become better able to develop industry, provide public services, create jobs and attract residents.

In accelerating urbanization, the government should speed up the reform of the household registration system, create an equitable institutional environment for freedom of movement and expand the coverage of basic public services in urban areas to migrant workers and other permanent residents, he said.

Currently, there are about 10 megacities in China with more than 10 million people each, including Beijing, Shanghai, Tianjin, Guangzhou and Chengdu, according to the latest census figures.

China's urbanization rate rose by 1.3 percentage points to 52.57 percent last year, 0.5 percentage points higher than expected, according to data from the National Bureau of Statistics. The government expects the rate to climb further to 53.37 percent in 2013.

Also yesterday, the National Development and Reform Commission released the country's goals on aspects including trade, retail sales and investment (see chart on the far right).

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