Call it the 7 per cent solution. Wen Jiabao, China’s prime minister,

pre-released that magic number in an internet chat with the nation on Sunday. It is the new target for real annual growth in gross domestic product in the forthcoming five-year plan. The decline from the previous plan’s 7.5 per cent target is a modest 7 per cent, but these little sevens add up to a step-change.

At first glance, the change appears to be significantly downward, since the new target is much lower than the 10 per cent average GDP growth over the past five years. The new target certainly looks to be more in line than the old one – Tuesday’s purchasing managers’ index for manufacturing was at its lowest in six months. But the Chinese government has not become less ambitious. The more modest goal reflects two realities.