Premier Li Keqiang's news conference on last day of NPC annual session will help identify priority areas of reforms

The Government Work Report presented by Premier Li Keqiang on the opening day of the National People's Congress annual session on March 5 provided useful clues to the government's priorities and objectives for the rest of the year.

The big news on day one of the NPC session was that the government set the GDP growth target at "about 7.5 percent" for 2014, unchanged from last year. At face value, this is disappointing. There has been a growing recognition, inside as well as outside the government, that addressing China's structural problems should take priority over headline rates of growth, as long as this can be achieved without major job losses.

In particular, credit and investment spending need to slow down. But with consumer spending growth likely to be stable and exports on course only for a moderate acceleration, any appreciable slowdown in credit and investment would be almost certain to pull growth below 7.5 percent.

That said, there are also signs that the government is giving itself more room to maneuver on growth. In its report on March 5, the National Development and Reform Commission, China's highest planning body, said the GDP growth target is "flexible". It did not say that last year. It also stated that local governments "must not seek faster growth or compete with each other to have the highest growth rate". Also, People's Bank of China Governor Zhou Xiaochuan recently said he thought that growth of between 7 percent and 8 percent would be appropriate. It appears that policymakers are no longer inclined to defend the target at all costs.

Regarding reforms, while the goals laid out at the Third Plenum of the 18th Central Committee of the Communist Party of China in November have been largely reiterated, there were a few noteworthy takeaways. First was a strong signal on financial reform. The premier's work report suggests a deposit insurance scheme will be put in place this year to help speed up the process of interest rate liberalization. The report also indicated the first private bank may be launched this year.

China's GDP growth target for 2014 set at 7.5 percent	Infographic: Five key words from Li's govt report