You are here: Home » International » News » Economy
Business Standard

China will not set target to double GDP from 2021: Party official

It could also give Chinese policymakers more room in theory to press ahead with painful, structural reforms

Reuters  |  Beijing 

Chinese President Xi Jinping, front row center, leads other cadres to raise their hands to show approval of work reports during the closing ceremony for the 19th Party Congress at the Great Hall of the People in Beijing. (Photo: AP| PTI)
Chinese President Xi Jinping, front row center, leads other cadres to raise their hands to show approval of work reports during the closing ceremony for the 19th Party Congress at the Great Hall of the People in Beijing. (Photo: AP|PTI)

will not set a target to double gross domestic product (GDP) from 2021, a senior Communist Party official said on Thursday, as top leaders pledge to focus on better quality economic growth in the long term.

Yang Weimin, vice minister of the Office of the Central Leading Group on Financial and Economic Affairs, told a news conference the government will not solely pursue economic expansion and will emphasise the quality of its growth.

A shift away from ambitious long-term government growth targets would be a departure from past practice in and mark a new strategy for longer-term economic development.

It could also give Chinese policymakers more room in theory to press ahead with painful, structural reforms.

The Monetary Fund (IMF) and many economists have urged to do away with or lower official growth targets altogether to reduce the country's long reliance on debt-fuelled stimulus and encourage more productive investment.

The warned this year that China's credit growth was on a "dangerous trajectory" and called for "decisive action", while the Bank for Settlements said in late 2016 that excessive debt growth was signaling a banking crisis in the next three years.

is well on track to hit its goal of doubling and per capita income by 2020 from 2010 levels, a performance which has given the global a solid boost since the financial crisis.

In the opening speech of a key twice-a-decade Communist Party Congress this week, President said would deepen economic and financial reforms and further open its markets to foreign investors as it looks to move from high-speed to high-quality growth.

Xi set bold long-term goals for China's development, envisioning it as a modern socialist country by 2035, and a modern socialist "strong power" with leading influence on the world stage by 2050.

However, this week's congress did not include any public announcements about new economic growth targets.

Analysts believe the government will continue to set annual growth targets through to 2020.

"Macro economic policies will focus more on employment, income growth and balance of payments," said Tang Jianwei, senior economist at Bank of Communications in Shanghai.

The world's second-largest faces growing environmental, resource and debt constraints, while its the gap between the U.S. - the largest - is narrowing, he said.

But it's still unclear if the government will scrap its annual growth target from 2021, Tang added.

Yang said will focus on preventing "major risks" in the economy, fighting poverty and pollution by 2020.

"The main contradiction of our society has changed and our country's economic development has been shifted to high-quality growth from high-speed growth," Yang said.

"We will not solely pursue economic growth, but will achieve growth by enhancing quality, efficiency and changing growth drivers."

Buoyed by strong government infrastructure spending and record lending by state banks, China's will likely grow 6.8 percent in 2017, topping the official target and accelerating for the first time in seven years, a Reuters poll showed.

But is walking a tightrope as it looks to contain debt and property bubble risks without stunting economic growth.

China's growth target for this year is around 6.5 percent, a level which some analysts expect will be carried over into 2018.

 

(Reporting by Ben Blanchard; Writing by Kevin Yao; Editing by Jacqueline Wong, Sam Holmes and Kim Coghill)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, October 26 2017. 14:06 IST
RECOMMENDED FOR YOU