China’s focus on annual GDP targets to relax policy

9 March, 2021 12:00 AM printer

BEIJING: China refrained from setting an economic growth target in its most recent five-year plan to account for greater uncertainties and give policymakers room to respond to changes more flexibly, a senior state planner official said on Monday.

In its 2021-2025 economic plan delivered to the nation’s legislature on Friday, China did not include any average annual growth targets, pledging to keep growth in a “reasonable”range”, unlike a previous five-year plan issued in 2016, report agencies.

It did, however, set an annual gross domestic product target of above 6 per cent for the current year, having dropped the 2020 target last year amid global uncertainties caused by the pandemic.

Hu Zucai, vice-director of the National Development and Reform Commission, said on Monday China will set annual growth goals throughout the five year period contingent on the circumstances, as predicting growth for the year period would be easier.

“By not setting a specific and quantitative (five-year) growth target, we will be more proactive, active and at ease in coping with all sorts of risks, which is conducive to boost the flexibility of our development,” Mr Hu told a press conference on the sidelines of the annual parliament meeting.

He added that it also helps to guide agencies to focus on improving the quality of efficiency of growth, instead of just numerical growth.

“We are confident that GDP will maintain a certain level (over the next five years),” he said.

Some Chinese policy advisers estimates show China needs to maintain average annual growth of at least 4.7 per cent in the next 15 years to bring the GDP per capita in line with that in moderately developed countries, a longer-term target outlined by the Chinese leadership.

The world’s second-biggest economy expanded 2.3 per cent last year, the only major economy to report growth, although the growth was its weakest in 44 years, dragger lower by still weak consumption and soft investment demand.

China is confident of achieving its 2021 economic targets, Ning Jizhe, another NDRC vice head told the same briefing, adding that the economy in January-February period continued the steady recovery trend since the second quarter last year when China started to lift Covid-related lockdowns.

The economy is widely expected by economists to grow more than 8 per cent in 2021.