(Yicai) March 5 -- China has set its consumer inflation target at around 2 percent for this year, down from last year’s goal of around 3 percent, Premier Li Qiang said when presenting the government’s annual work report to the country’s top legislature.

The lower target is aimed at improving the supply-demand relationship and maintaining the overall price level within a reasonable range through various policies and reforms, Li said at the opening of the National People’s Congress in Beijing today.

The move was widely expected after most of China’s provinces set their annual consumer price index targets at around 2 percent in January. The national CPI climbed just 0.2 percent last year, falling short of target.

This year’s target not only reflects the issue of low prices but also underscores the urgency of promoting a reasonable increase in prices, Luo Zhiheng, chief economist at Yuekai Securities, told Yicai.

The central government will out more emphasis on price policies this year, Luo said, adding that it will intensify macroeconomic policy adjustments, while local governments will enhance industrial policy guidance, improve the supply-demand relationship, and rectify vicious competition.

China has previously set its CPI target at around 3 percent mainly to prevent prices from rising too fast, said Wu Chaoming, chief economist at Chasing Financial. But  in recent years prices have remained low and demand has been insufficient, so the lower target reflects the actual situation, Wu noted.

The NPC and the Chinese People's Political Consultative Conference, known together as the Two Sessions, meet each March to consider proposals and set the country's political and economic priorities for the year ahead.

Editor: Martin Kadiev