China sets GDP growth target at over 6pc

China’s GDP growth target is relatively modest, and lower than most economists’ expectations, but signals continued optimism.

Chinese President Xi Jinping, left, and Premier Li Keqiang, right, applaud during the opening session of the Chinese People's Political Consultative Conference. Picture: Getty Images

Chinese leaders have said they will target gross domestic product growth of 6 per cent or more this year, a relatively modest goal that nonetheless signals continued optimism after a year in which the coronavirus eviscerated the global economy.

The growth target of 6 per cent or more, announced Friday in Beijing by Premier Li Keqiang, is comfortably lower than most economists’ consensus expectations for the world’s second-largest economy to grow by 8 per cent or more this year.

Even so, many economists had predicted that Beijing would forgo the numerical target altogether, after a year in which the uncertainties of the COVID-19 pandemic pushed China to drop its target for the first time since 1994.

China’s economy recovered relatively quickly from an initial outbreak centred in the Chinese city of Wuhan, and finished the year with an economic expansion of 2.3 per cent, becoming the only major economy to report growth in 2020.

With growth momentum approaching pre-virus levels, Beijing policy makers have signaled that they plan to gradually withdraw stimulus measures and focus instead on reining in debt and heading off an emerging bubble in the real-estate market.

Mr Li said in his annual government report on Friday that the government would seek to cut the fiscal deficit ratio target to 3.2 per cent of China’s projected GDP this year, compared with a target of above 3.6 per cent in 2020.

Beijing also plans to reduce the amount of debt that local governments are permitted to raise this year. China plans to let localities issue 3.65 trillion yuan in local government special-purpose bonds in 2021, lower than the 3.75 trillion yuan earmarked last year. The bonds are primarily used to fund infrastructure projects.

Mr Li said China aims to keep consumer price inflation at around 3 per cent in 2021, compared with last year’s 3.5 per cent target and its actual increase of 2.5 per cent.

The government also said it plans to create 11 million new jobs this year, higher than the new-jobs target of nine million for 2020. It also aimed to cap the urban surveyed jobless rate at 5.5 per cent in 2021, compared with a ceiling of 6 per cent in 2020.

Dow Jones Newswires