This is official: the previous target of maintaining an 8 percent annual GDP growth rate in China has been lowered to 7.5 percent. After promoting and defending “bao ba 保八” (“protect the 8 percent GDP growth target”) for about eight years, Premier Wen Jiabao of China unveiled the new target at the start of the annual National People’s Congress in early March.

The 8 percent target was quite important, as many analysts associated it with such major factors as a high level of employment, social stability and maintaining the momentum of the economic growth. So how significant was it for the Chinese leadership to lower this target, and why did they do it? First of all, even though the earlier target was set at 8 percent, the economy grew much faster. In 2011, China’s GDP grew by 9.2 percent, and in 2010 it stood at 10.4 percent. So, with the 7.5 percent target, the economy most likely will grow close to 8 percent if not faster.