China's top leadership and government officials began conducting meetings Tuesday to establish economic and reform plans for 2015, and influential research institutions are recommending that the government cut next year's economic growth to 7 percent.

Like Us on Facebook

China will likely to fall short of its 7.5 percent target for 2014, marking the first time in 15 years the country was unable to meet its growth target. It could also report full-year growth that is its weakest in the last 24 years, according to a report by Reuters.

Several Research institutions - which do not have decision-making power, but do have influence on the process - recommend that Beijing reduce its GDP growth from this year's 7.5 percent down to 7 percent in 2015.

"I think it should be 7 percent if there are no more surprises. But it can't be lower than 7 percent, otherwise there could be employment problems and debt default problems," a senior economist at the Chinese Academy of Social Sciences (CASS) told Reuters.

Economists are predicting policymakers will ease up and implement a combination of rate cuts in addition to requirements for bank reserves being reduced in an effort to entice more lending, even though bad loans continue to pile up.

In addition to a 7 percent growth target, the chief economist at the State Information Centre also recommends China's leadership work to lower consumer inflation from 3.5 percent to a 3 percent 2015 target after falling prices on commodities. The economist also mentioned that China should be aiming to create 10 million new jobs.

The Chinese government could potentially budget a deficit of about 3 percent of GDP next year - marking a 0.9 percent increase from 2014 - which would allow local governments to cut back on raising funds from financial vehicles and instead allow them to individually sell bonds.

"We will close the back door, barring local governments from raising debt via special purpose vehicles, but we must open up the front door. We need to boost fiscal spending and expand the budget deficit as we need to stabilize growth," said the CASS economist.

The meetings between China's top leadership is said to run until Thursday, but 2015's economic targets aren't expected to be announced until the national parliamentary session in early March. 

Tagsinflation, employment