Drop in China’s econonic growth target sends markets into a spin

MARKETS fell around the world as China cut its official economic growth target to its lowest level in eight years yesterday.

Premier Wen Jiabao lowered the target growth rate from eight per cent to 7.5 per cent, claiming the slower level allowed for “higher level, higher quality development”.

The FTSE fell 0.61 per cent, the Nasdaq dropped 0.86 per cent, and the EuroStoxx 50 was down 0.64 per cent on the downbeat news.

China is set to focus on shifting the economy from export-led growth toward more consumption.

“We will vigorously adjust income distribution, increase the incomes of low and middle-income groups, and enhance people’s ability to consume,” said Wen.