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Slower, more sustainable growth good for China: central banker

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Somewhat slower growth will allow a reformed Chinese economy to become more stable and should be good news, the head of China's central bank said on Wednesday.

[DAVOS] Somewhat slower growth will allow a reformed Chinese economy to become more stable and should be good news, the head of China's central bank said on Wednesday.

Zhou Xiaochoan, governor of the People's Bank of China, said the People's Congress, the parliament, would discuss a lower growth target at its annual session in March. He declined to give a figure, saying it was for the Congress to set.

China announced on Monday that growth slowed to 7.4 per cent in the final quarter of 2014, the lowest rate for 20 years but slightly higher than markets had expected.

"If China's growth slows down a bit but economy becomes more sustainable, that's good news," Mr Zhou told the World Economic Forum in Davos, Switzerland.

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China's previous export-led growth rate had been unsustainable and it was right for the government to focus on structural reforms to make the economy more sustainable, including a transition to renewable energy sources, he said.

"If the government pursues too high a growth rate, it will postpone necessary structural reform," Mr Zhou said. "What people care more about now is structural reform. We'd like to sacrifice a little bit lower growth rate as long as we have structural reform."

REUTERS

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