China has cut the growth target for industrial output to 9.5 percent in 2014, the country's industry watchdog announced Tuesday, underlying the downward pressure that is still weighing on the economy.

"China's economy, especially the industrial sector, is in a process of ­restructuring and transition, and the growth speed is changing gear. So the temporary slowdown is quite normal," Mao Weiming, a vice minister of the Ministry of Industry and Information Technology (MIIT), said at a press conference in Beijing on Tuesday.

Mao said there are still many favorable conditions and positive factors in the country's economic development, and it is generally believed that this year's growth will be higher than last year.    

"Speed is only a quantitative concept. We value development quality more," Mao said, noting that achieving a 9.5 percent growth target with the requisite quality is still not easy.

China's industrial output grew by 9.7 percent in 2013 from a year ago, down from the 10 percent growth registered in 2012 and also missing its annual target of 10 percent. 

Industrial output, a key indicator for economic activity in 41 industries, covers companies with an annual business revenue of at least 20 million yuan ($3.27 million).

"The new growth target for industrial output sends an encouraging signal. It means China's industry will focus on restructuring and eliminating overcapacity," Chen Yao, director of the Institute of Industrial Economics at the Chinese Academy of Social Sciences (CASS), told the Global Times Tuesday. 

Mao of the MIIT said the ministry will step up efforts to get rid of outdated capacity in 2014 and that it aims to reach the target set in the 12th Five-Year Plan (2011-15) one year ahead of schedule.

No new production capacity must be added to five industries including steel, cement, electrolytic aluminum and shipbuilding before 2017, Mao said. 

Addressing industrial overcapacity will help put the country's industry and economy on a benign cycle of development, and the current international and domestic situations indicate the economy will maintain stable growth in 2014, said Chen from the CASS.

China's GDP grew by 7.7 percent in 2013, surpassing the official target of 7.5 percent but below the target of 8 percent growth in previous years.

The government is due to announce its 2014 growth target at the annual sessions of the national legislative and consultative bodies in March.

"The newly announced growth target for industrial output means China is likely to keep its annual growth target at 7.5 percent," Li Heng, an analyst with Minsheng Securities, told the Global Times on Tuesday. 

"There is still downward pressure on the economy, which comes from the possible slowdown in the real estate sector and a contradiction between rising investment and restructuring," Li said.

Meanwhile, China will aim to achieve an 8 percent increase in revenues in telecommunications and a 20 percent increase in revenue from software and information technology services, according to a report released by the MIIT at the press conference.

Information technology-related consumption hit 2.2 trillion yuan in 2013, up 28 percent from 2012, the report said. Consumption of information products reached 1.2 trillion yuan in the year while consumption of information services stood at 1 trillion yuan.   

The State Council, the country's cabinet, rolled out a series of measures to boost consumption of information products and services in August 2013.

"With the government's support, information technology-related consumption will become a new engine for boosting domestic demand and the economy. Its contribution to GDP will get bigger," Li said.

Global Times