China’s leaders said on Friday that they had set a target for GDP to grow more than 6 per cent this year, as the world’s second largest economy surges out of a pandemic-induced slump.
The global growth powerhouse stuttered in 2020, logging its slowest expansion in four decades as strict virus containment measures at home collided with a freeze in international trade.
The slowdown raised doubts about the Communist Party’s ability to deliver on its pledge of continued prosperity in return for unquestioned political power.
But with the coronavirus largely brought under control domestically, analysts expect a strong comeback, with some suggesting the economy could expand by as much as 9 per cent this year.
Beijing usually sets a target it feels it can exceed. It did not set one at all last year.
Announcing the figure at the start of the annual legislative session, premier Li Keqiang said that the government had ‘taken into account the recovery of economic activity’.
The target of over 6 per cent also dovetails with future goals, Li said, and these include reform, innovation, and ‘high-quality development’.
Authorities say that they want to create 11 million new urban jobs this year, and keep urban unemployment around 5.5 per cent.
Outside observers caution that China’s unemployment figures may not tell the whole story, with many people across the vast nation involved in the informal workforce.
Analysts had widely predicted the continued global uncertainty would make it tricky for China to set a GDP target again this year, and greeted the 6-per cent figure as deliberately cautious.
‘The bar is set too low... (it’s) as if there is no target,’ ING chief economist for Greater China Iris Pang told AFP.
This could be because Beijing does not want to slash its growth target next year, when distortions from the pandemic subside, added Nomura chief China economist Lu Ting.
The figure also reflects ‘the shifting focus from quantity to quality of economic growth’, said Zhu Chaoping, a strategist at JPMorgan Asset Management.
That could include resources being allocated to long-term initiatives like environmental protection, Zhu added.
Leaders also did not specify a growth target in its new five-year plan draft published on Friday, as is its usual custom, only saying it would be ‘maintained within a reasonable range’.
China has been trying to rebalance the economy from its export- and investment-led economic model to one driven by consumer spending and high-quality development.
The post-COVID economic rebound saw China’s GDP growth recorded at about two per cent last year, which made it the only major economy to post positive figures in a year lost to the virus.
With weakness around the world caused by the prolonged pandemic shutdown, capitals around the globe will be watching China’s economic performance eagerly.
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