China's new growth target is ...

Robots are taking over China's factory floors
Robots are taking over China's factory floors

Beijing has set an economic growth target of 6.5% over the next five years as it seeks to implement vital reforms.

Premier Li Keqiang said Sunday that China will need to produce annual growth of at least 6.5% to meet the government's goal of establishing a "moderately prosperous society" by 2020.

Li's comments suggest that Beijing's annual growth targets will trend lower as the current decade draws to a close. Beijing's growth target for 2015 is 7% -- a tick faster than the 6.9% expansion in the third quarter.

Growth of 6.5% is a far cry from the heady days when China was expanding at a rate of 10% on a regular basis. But it should be strong enough to keep unemployment low and maintain social order.

Analysts have known for a long time that China's growth would slow. It had to weaken, in fact, as Beijing made reforms designed to shift the country away from relying on building roads, railways and housing to generate growth, to an economy powered by consumer spending and service industries.

That's happening now. Yet economists are worried about the slow pace of reforms, as well as systemic risks in the housing market and shadow banking sectors.

In the near term, experts say the government will likely continue with piecemeal stimulus to support the economy and keep those risks at bay. The central bank has already cut interest rates a handful of times this year, and told banks they could lend more.

Beijing has not yet released its official growth target for 2016.

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